What is Credit Guarantee Scheme and Seed funds for Startups?
- Government backed Credit scheme to solve credit related problems for early stage startups in India
What is Difference Between Credit Guarantee Scheme and Seed funds for Startups?
- Credit Guarantee Scheme are the credit loans for startups given to fulfill for working capital shortfalls.
- Seed Funds are credit given to startups which are in ideation to proof of concept stages.
Which department is to launch this scheme?
- DPIIT (Department for Promotion of Industry and Internal Trade)
- formerly was known as: DIPP (Department of Industrial Policy & Promotion)
How much amount of fund will be used for the scheme?
- The Department has not yet clarified the exact amount of fund that will be available for the credit scheme.
Why was this scheme required?
- Realising the fact that most startups literally face problems to raise fund or finance at the early stage and need to solve the problem
- This scheme is part of larger Roadmap of the government of India to develop better startup ecosystem in India.
- Ease of doing business and attracting foreign investments
Which States or union territory will have access to this scheme?
- The Credit Scheme form DPIIT will available nation-wide pan India.
- It is also called as National Credit Seed Fund as implied
- by DPIIT Secretory Guruprasad Mohapatra.
How this fund will be available for Startups?
- Government does not directly invest or finance the startups.
- The funds will be made available to banks.
- Banks will let the funds to be utilised by the startups as per the scheme.
When this scheme will be available?
- The scheme has yet to get the approval from the finance ministry.
- Once the approval is granted, DPIIT will have to get the green signal from Union Cabinet.