DPIIT notifies expansion of Credit Guarantee Scheme for Startups; cover per borrower raised to ₹20 crore
DPIIT notified the expansion of the Credit Guarantee Scheme for Startups (CGSS) on 9 May 2025, raising the guarantee ceiling per borrower from ₹10 crore to ₹20 crore and cutting the annual guarantee fee for 27 Champion Sectors to 1%.
Summary
The Department for Promotion of Industry and Internal Trade (DPIIT) notified the expansion of the Credit Guarantee Scheme for Startups (CGSS), announced on 9 May 2025. The ceiling on guarantee cover per borrower rises from ₹10 crore to ₹20 crore. Cover is 85% of the amount in default for loans up to ₹10 crore and 75% for loans above ₹10 crore. The Annual Guarantee Fee for startups in the 27 Champion Sectors identified under 'Make in India' is cut from 2% to 1% a year.
Key facts
- Notified by
- DPIIT, Ministry of Commerce and Industry
- Ceiling per borrower
- ₹10 crore → ₹20 crore
- Cover
- 85% (loans up to ₹10 crore); 75% (above ₹10 crore)
- Annual Guarantee Fee
- 2% → 1% p.a. for 27 Champion Sectors
Practice MCQs 3 questions
After the expansion notified in May 2025, what is the ceiling on guarantee cover per borrower under the Credit Guarantee Scheme for Startups?
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Correct answer: C — ₹20 crore
The ceiling was raised from ₹10 crore to ₹20 crore.
Consider the following statements about the expanded CGSS: 1. Guarantee cover is 85% of the amount in default for loans up to ₹10 crore. 2. The Annual Guarantee Fee for startups in Champion Sectors was raised to 2% per annum. Which of the statements given above is/are correct?
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Correct answer: A — 1 only
Only 1 is correct. The Annual Guarantee Fee for Champion Sectors was reduced from 2% to 1% per annum.
The reduced Annual Guarantee Fee under the expanded CGSS applies to startups in how many Champion Sectors?
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Correct answer: D — 27
The fee was cut to 1% for startups in 27 Champion Sectors identified under 'Make in India'.