Govt expands credit scheme for startups, raises guarantee cap to INR 200 mln
This story was originally published at 13:33 IST on 9 May 2025
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NEW DELHI – The government Friday notified expansion of the Credit Guarantee Scheme for Startups. Under the scheme, the government has doubled the maximum guarantee coverage per borrower to INR 200 million, the commerce ministry said in a release.
The government has raised the guarantee cover to 85% of the amount in default for loan amount up INR 100 million and 75% for loan amount exceeding INR 100 million, according to the release. It has also slashed the annual guarantee fee to 1% per annum from 2% per annum.
The expansion of the Credit Guarantee Scheme for Startups is in line with the announcement made in the Budget for 2025-26 (Apr-Mar). "The expanded scheme will reduce the perceived risks associated with lending to startups in established financial institutions, enabling greater financial flow and runway for startups to undertake research and development, experimentation, and create cutting-edge innovation and technologies," the ministry said in the release. End
Reported by Vivek Das
Edited by Ashish Shirke
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