Recently central government had announced to provide

Solution

The Department for Promotion of Industry and Internal Trade (DPIIT) notified the establishment of the Credit Guarantee Scheme for Start-ups (CGSS). It would provide collateral-free debt funding up to Rs 10 crore for start-ups extended by commercial banks, non-banking financial companies (NBFCs) and Securities and Exchange Board of India (SEBI)-registered alternative investment funds (AIFs). The credit guarantee cover under the scheme would be both transaction-based (for single eligible borrowers) and umbrella-based (for a group of eligible borrowers). The extent of transaction-based cover will be 80 per cent of the credit facility up to Rs 3 crore, 75 per cent of the credit facility between Rs 3 and 5 crore, and 65 per cent of the credit facility between Rs 5 and 10 crore.