The Credit Guarantee Scheme for Startups (CGSS) is a key initiative in India’s efforts to support its growing startup ecosystem. Launched on October 6, 2022, the scheme provides collateral-free loans up to ₹10 crore per borrower. This addresses one of the main challenges startups face: access to affordable debt.
The CGSS uses a fully digital and automated process. Member lending institutions (MLIs) ensure that startups meet the eligibility criteria. Loans are provided through two models: transaction-based lending for individual borrowers and portfolio-based lending for alternative investment funds (AIFs).
The scheme involves scheduled commercial banks, NBFCs, and AIFs, among others. As of December 31, 2024, 28 lenders are registered under the scheme. 257 loans worth ₹601.86 crore have been guaranteed, generating employment for 20,871 individuals.
The initiative also offers special benefits to women borrowers. It includes startups in diverse regions, such as Tier II and Tier III cities. Key segments benefiting from the scheme include IT, capital goods, textiles, and consumer services.
The manufacturing and services sectors receive particular support. The Credit Guarantee Scheme for Startups, along with other funding initiatives, is crucial in transforming India’s startup ecosystem.
Supporting India’s startup ecosystem
By providing essential financial support, these schemes help startups overcome initial hurdles. They also foster a culture of innovation and entrepreneurship across the country, driving economic growth and development. India’s thriving startup ecosystem has produced successful entrepreneurs whose educational backgrounds played a significant role in their success.
Here are some examples:
Vineeta Singh, Co-founder & CEO of Sugar Cosmetics, attended IIT Madras and IIM Ahmedabad. Namita Thapar, Executive Director of Emcure Pharmaceuticals, obtained a B.Com from Savitribai Phule Pune University and an MBA from Duke University. Aman Gupta, Co-founder and CMO at boAt, earned an MBA from the Indian School of Business.
Anupam Mittal, Founder & CEO of People Group and Shaadi.com, completed his MBA at Boston College. Peyush Bansal, Founder & CEO of Lenskart, graduated from McGill University and attended IIM Bangalore. Ghazal Alagh, Co-founder and Chief Mama of Mamaearth, earned a Bachelor of Science from Punjab University.
Ritesh Agarwal, Founder and CEO of OYO Rooms, attended the Indian School of Business and Finance. Byju Raveendran, Founder of BYJU’s, completed his B.Tech from the Government College of Engineering, Kannur. Vijay Shekhar Sharma, Founder of Paytm, graduated from Delhi College of Engineering at 19.
Falguni Nayar, Founder of Nykaa, earned her postgraduate degree from IIM and completed her B.Com from Sydenham College. These diverse educational journeys have contributed to the success of India’s top startup founders and continue to inspire aspiring entrepreneurs across the country.
