DIPP’s proposal for a collateral free loan for startups has been given a nod and the government will soon be launching this Credit Guarantee Fund with a corpus of Rs.2000 crores. The Secretary of Department of Industrial Policy and Promotion (DIPP), Mr. Ramesh Abhishek said that the motive is to support the ventures and their risk taking abilities. He also added-

“We are in the process of setting up a credit guarantee fund of Rs 2,000 crore corpus that will provide up to 80 per cent risk cover for collateral free credit being given by banks to startups.”

Mr. Ramesh Abhishek was addressing a conference on Start Up India, Challenges and Sustainability, organized by the PHD Chamber of Commerce and Industry. He explained that with this corpus of Rs.2,000 crores in place, the Start-Ups would receive financial support from banks and financial institutions with collateral free guarantee.


Unlike the usual procedure for obtaining loans, where banks ask for stuff like collateral, track record, revenue flow, previous balance sheets, etc.this scheme makes the process significantly easier.At the event it was also said that the government is working on the relaxations on existing taxes for start-ups. He added that this is one of the top priorities of the Modi government as it would not only create wealth for promoter of such ventures but also facilitate employment creation.

The department is also going to launch a learning module for startups and entrepreneurship. With the interaction and feedback from startups, the DIPP has identified about 25 issues including things related with employee stock ownership plans (ESOPs) on which the department is now known to focusing its attention on.

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Ruchi Pandita

Ruchi is a word-weaver, a painter, an amateur photographer and a poet at heart. The ease with with she can explain the most complex stuff impresses people around her. Being a gemini, she is never content, always looking for new ways to explore her self and the world around. The startup revolution has greatly influenced her and she is using her talent to help budding entrepreneurs find the way forward.

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