Credit Enhancement Guarantee Scheme For The Scheduled Castes

DETAILS The scheme "Credit Enhancement Guarantee Scheme for the Scheduled Castes (SCs) (CEGSSC)" by the Department of Social Justice and Empowerment, Ministry of Social Justice and Empowerment, Government of India, aims to promote entrepreneurship among Scheduled Castes, support innovation and growth-oriented enterprises, facilitate financial inclusion, generate employment, and encourage economic development through credit enhancement guarantees. Through this scheme, credit enhancement guarantee support is provided to banks and financial institutions that extend financial assistance to eligible Scheduled Caste entrepreneurs. The scheme is implemented by IFCI Limited (Industrial Finance Corporation of India Limited) as the nodal agency. Under the scheme, the Government of India has established a corpus fund of ₹200 crore to provide guarantees for working capital loans, term loans, and composite term loans extended to eligible Scheduled Caste entrepreneurs. The scheme seeks to improve access to finance, create wealth and employment opportunities, encourage profitable business ventures, and strengthen forward and backward economic linkages across communities. The scheme is operational across India on an ongoing basis. Objective: To promote entrepreneurship among the Scheduled Caste population across India. To promote innovation and growth-oriented entrepreneurship among Scheduled Castes. To provide Credit Enhancement Guarantees to banks and financial institutions financing SC entrepreneurs. To create wealth, generate employment, and build confidence among Scheduled Castes. To promote financial inclusion and economic development of SC entrepreneurs. To enhance direct and indirect employment generation for SC communities. BENEFITS The scheme provides guarantee cover for Working Capital Loans, Term Loans, and Composite Term Loans extended to eligible Scheduled Caste entrepreneurs. Loan Amount Guarantee Cover Guarantee Obligation ₹15,00,000/- to ₹1,00,00,000/- 100% of the sanctioned facility 100% of the amount in default, subject to maximum guarantee cover Above ₹1,00,00,000/- to ₹2,00,00,000/- 80% of the sanctioned facility 80% of the amount in default, subject to maximum guarantee cover Above ₹2,00,00,000/- to ₹5,00,00,000/- 70% of the sanctioned facility 70% of the amount in default, subject to the maximum guarantee cover Above ₹5,00,00,000/- 60% of the sanctioned facility 60% of the amount in default, subject to the maximum guarantee cover Additional Benefit Conditions: The maximum guarantee cover available under the scheme is ₹5,00,00,000/-. Startup Scheduled Caste entrepreneurs are eligible for guarantee coverage. Individual Scheduled Caste entrepreneurs are eligible for guarantee cover on loan amounts up to ₹1,00,00,000/-. Repeat credit enhancement may be extended after successful liquidation of the first facility and a satisfactory track record. Incubation facilities may be facilitated through existing departmental schemes for loans above ₹2,00,00,000/-. Mode of Disbursement: Benefits are provided in the form of Credit Enhancement Guarantees issued by IFCI to Member Lending Institutions (MLIs). Loans are extended by Member Lending Institutions to eligible Scheduled Caste entrepreneurs. Expected Time of Disbursement The guarantee is issued after submission of the sanction letter, proof of disbursement, and the guarantee fee by the Member Lending Institution within 30 days of the first loan disbursement. Validity Initially valid for 1 year. Renewable annually. The maximum tenure of guarantee cover is 7 years or the repayment period, whichever is earlier. ELIGIBILITY The applicant should establish, promote, and operate an enterprise, project, or unit in the primary, manufacturing, or service sector resulting in asset creation. The applicant should be a Scheduled Caste entrepreneur, company, partnership firm, society, sole proprietorship firm, or individual entrepreneur as specified under the scheme. The applicant should have more than 51% ownership and management control held by Scheduled Caste entrepreneurs, promoters, partners, or members. The applicant should maintain Scheduled Caste ownership and control above 51% throughout the currency of the loan. The applicant should provide documentary proof of Scheduled Caste status. The applicant may operate under any Central Government or State Government subsidy or grant scheme. Preference is given to Scheduled Caste-promoted companies over registered partnership firms and registered societies.  Exclusions The credit facility is covered under any other guarantee scheme operated by the Deposit Insurance and Credit Guarantee Corporation, Reserve Bank of India, Small Industries Development Bank of India, Government, insurer, or any other person/association providing insurance, guarantee, or indemnity coverage. The credit facility does not comply with any applicable law or directions/instructions issued by the Central Government or Reserve Bank of India. The borrower has already availed another credit facility covered under specified guarantee schemes, and the previous guarantee has been invoked, but dues remain unpaid due to the borrower's default. The credit facility has been sanctioned against collateral security and/or third-party guarantee. The credit facility has been sanctioned with an interest rate exceeding 3% over the base rate of the lending institution. The credit facility has not been fully disbursed by the Member Lending Institution.