Credit Guarantee, Seed Fund Schemes On Anvil To Support Startups

The government is working on two schemes to support startups in India. DPIIT Secretary Guruprasad Mohapatra said on Sunday (September 13) that the credit guarantee and seed funds scheme were currently going through an inter-ministerial consultation process to work out the contours of the schemes.

“We are working on a credit guarantee scheme and a seed fund scheme. Both are under inter-ministerial consultations,” the secretary told PTI. Both the schemes would require the approval of the finance ministry and then the DPIIT would seek nod of the Union Cabinet for these two schemes.

Currently, seed fund schemes are present in states like Gujarat and Kerala. “The central government ministries also have, but we want to put a pan India scheme,” the secretary said. He said there would be a corpus in the credit guarantee scheme which would be given to banks and they will leverage that to lend to startups.

Mohapatra said a corpus would be set up in the credit guarantee scheme which would be given to banks and they will leverage that to lend to startups. This scheme is likely to give banks comfort to lend. The corpus, he said, would be given as credit and not as venture capital.