CGS rEvised To Boost Startup Funding, R&D

New Delhi: The revised credit guarantee scheme (CGS) for startups will further reduce the perceived risks of lending to them, enabling greater financial support to undertake research and development, and creating cutting-edge technologies, an official statement said on Friday.

The government on Thursday approved a revised Credit Guarantee Scheme for Startups (CGSS), which increases the ceiling on guarantee cover per borrower from Rs 10 crore to Rs 20 crore. The broad objective of CGSS is to provide guarantee up to a specified limit against credit instruments extended by member institutions to finance eligible startups.

This scheme would help provide the much needed collateral-free debt funding to startups. “The expanded scheme will further reduce the perceived risks associated with lending to startups in established financial institutions,” DPIIT said.