Guarantee
CGSSI: the Stand-Up India credit guarantee
सीजीएसएसआई: स्टैंड-अप इंडिया की क्रेडिट गारंटी
The Credit Guarantee Scheme for Stand-Up India (CGSSI) lets banks give Stand-Up India loans without asking for collateral or a third-party guarantee. It is run by the National Credit Guarantee Trustee Company (NCGTC). If a guaranteed loan goes bad, the guarantee pays the bank part of its loss. That lowers the bank’s risk on a first-time borrower who has no property to pledge.
On 11 November 2026 the Union Cabinet approved a credit guarantee corpus of ₹4,111 crore for the continued scheme. It also set guarantee cover at 85% of the loan amount and a standard guarantee fee of 0.50%.
CGSSI at a glance
| Item | Detail |
|---|---|
| Full name | Credit Guarantee Scheme for Stand-Up India |
| Run by | National Credit Guarantee Trustee Company (NCGTC) |
| Loans covered | Over ₹10 lakh, up to ₹1 crore, incl. working capital |
| Collateral needed | None for the guaranteed portion |
| Third-party guarantor | Not needed |
| Cover (2026 approval) | 85% of the loan amount |
| Standard fee (2026 approval) | 0.50% |
| Corpus (2026 approval) | ₹4,111 crore |
| Who decides | Your bank: collateral or guarantee |
Sources: Stand-Up India FAQs; PIB, 11 November 2026.
What CGSSI is
A credit guarantee is a promise made to the bank, not to you. NCGTC agrees that if a covered loan turns into a loss, it will pay the bank an agreed share of it. In return, a guarantee fee is paid on the loan.
The Stand-Up India FAQs say the guarantee covers credit of over ₹10 lakh and up to ₹100 lakh, including working capital, given by eligible lenders to a single eligible borrower “without any collateral security and/or third party guarantees”. The scheme guidelines add that the guarantee norms are aligned with those of CGTMSE, the older guarantee fund for micro and small enterprises.
Who runs it: NCGTC
The National Credit Guarantee Trustee Company runs several government credit guarantee funds, including the one for Stand-Up India. Banks register their loans with NCGTC to get the cover. As a borrower you do not apply to NCGTC directly. Your bank handles the guarantee as part of the loan.
What changed in November 2026
The Cabinet approval for 2026–2031 sets out three guarantee terms:
- Coverage: 85% of the loan amount. The guarantee covers 85% of the loan amount, under NCGTC’s rules for claims.
- Standard guarantee fee: 0.50%. The release states the rate but not whether it is charged yearly or on the sanctioned or outstanding amount. The detailed NCGTC scheme notification will set that out.
- Corpus: ₹4,111 crore. This is the money set aside to back the guarantees.
Ask your bank how the fee will be charged and whether it will pass the fee on to you.
Collateral or guarantee: who decides
The scheme lets the bank secure the loan in one of two ways, on top of the assets you buy with the loan:
| Option | What it means for you |
|---|---|
| CGSSI guarantee | No property pledge; guarantee fee applies |
| Collateral | You pledge property or deposits; no guarantee fee |
Source: scheme features; Stand-Up India FAQs.
The FAQs answer a common question directly. If you have collateral, you are not compelled to take the credit guarantee. You may offer collateral instead, and you should discuss this with your banker. The bank decides which security it will accept.
In every case, the assets you buy with the loan, such as machinery or stock, are hypothecated or mortgaged to the bank as primary security.
What the guarantee does not do
People often misunderstand a credit guarantee. It does not:
- reduce what you owe. You still repay the full loan with interest. If you default, the bank can still recover from you, and your credit record is affected.
- guarantee approval. The bank still appraises your project and can turn it down.
- replace the margin money. You still need at least 10% of the project cost as your own contribution.
- give you a subsidy. It is risk cover for the bank, not money for the borrower.
A worked example
Suppose a bank sanctions a ₹40 lakh Stand-Up India loan and covers it under CGSSI.
| Item | Amount |
|---|---|
| Loan sanctioned | ₹40,00,000 |
| Guarantee cover at 85% | ₹34,00,000 |
| Part the bank carries itself | ₹6,00,000 |
| Collateral asked of you | None needed for the guaranteed loan |
The bank still carries part of the risk itself, which is why it checks your project carefully. For you, the main benefit is that you do not have to pledge a house, land or deposits to get the loan.
Why banks use the guarantee
The bankers’ FAQ on the Stand-Up India portal points to two supports for lenders. Banks lending under the scheme can take refinance from SIDBI, and they can cover collateral-free loans under NCGTC’s guarantee. Both make it easier for a branch to lend to a first-time borrower. If a branch tells you that “Stand-Up India loans need property”, ask whether it has considered CGSSI cover.
Questions to ask your bank
Before you accept a sanction, ask:
- Will this loan be covered by CGSSI, or are you asking for collateral? Why?
- What guarantee fee applies, and who pays it?
- Is the fee charged once or every year, and on which amount?
- If I offer collateral, will the interest rate or fee change?
- Which assets are hypothecated as primary security?
If a branch insists on collateral for a small loan that you believe the guarantee should cover, ask for the reason in writing. You can raise it with the Lead District Manager. See the grievance route.
How the guarantee fits the rest of the scheme
The guarantee is one of several features meant to make banks comfortable lending to first-time entrepreneurs. The others are the interest cap, the margin-money rules and handholding support. Read loan amount, margin money and interest and what Stand-Up India is for the full picture, or go straight to how to apply.
Guarantee cover and your credit record
A guaranteed loan is still a normal loan on your credit record. Every repayment you make on time builds your history with the bank and with credit bureaus, which helps when you later need more working capital or a second loan. If you miss payments, the bank follows its usual recovery steps, and the guarantee claim does not clear your name. If repayments become hard, speak to the bank early about rescheduling instead of waiting for the account to fall overdue.
FAQ
Is a Stand-Up India loan collateral-free? It can be. The bank may cover the loan with the CGSSI guarantee instead of collateral. The bank decides.
What is CGSSI? The Credit Guarantee Scheme for Stand-Up India, run by NCGTC. It covers Stand-Up India loans so banks can lend without collateral or third-party guarantees.
How much does the guarantee cover? The 2026 approval sets cover at 85% of the loan amount.
What is the guarantee fee? A standard fee of 0.50%, under the 2026 approval. Ask your bank how it is charged and who pays it.
Do I apply to NCGTC myself? No. Your bank arranges the guarantee.
If my loan is guaranteed, do I still have to repay? Yes. The guarantee protects the bank, not you. You must repay the full loan.
Can I refuse the guarantee and give collateral instead? Yes. The scheme says you are not compelled to take the guarantee if you have collateral. Discuss it with your bank.
More questions are on the Stand-Up India FAQ.
Last reviewed: 12 November 2026.
Related pages
Overview
Loan size, who can borrow, and how a first business is financed.
Loan and margin money
Amount, the 10% own share, the interest cap and the calculator.
How to apply
A bank branch, standupmitra.in, or the Lead District Manager.
What Stand-Up India is
Objective, the 2016 to 2031 timeline, and progress figures.
FAQ
Short answers on eligibility, loans, documents and complaints.