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New Budget Unveils Credit Enhancement Guarantee Scheme Empowering Scheduled Castes Entrepreneurs

New Delhi: In a landmark move, the “Credit Enhancement Guarantee Scheme for Scheduled Castes” (CEGSSC) was introduced during the 2014-15 Union Budget by the Ministry of Social Justice & Empowerment, Government of India. Initially funded with Rs. 200 crores, the scheme aims to foster entrepreneurship among Scheduled Castes by providing Credit Enhancement Guarantee to Member Lending Institutions (MLIs).

IFCI Ltd, acting as the Nodal Agency, oversees the implementation of the scheme, issuing guarantees to MLIs that support Scheduled Caste entrepreneurs. Under CEGSSC, entities ranging from Individuals to Registered Companies belonging to Scheduled Castes can access financial assistance for Term Loan, Composite Term Loans, or Working Capital facilities.

Key Highlights of the Scheme

– Entities led by SC entrepreneurs can secure loans from Rs. 15 lakhs to over Rs. 5 crores.

– Banks/MLIs can obtain guarantees under CEGSSC, with coverage ranging up to a maximum of Rs. 5 crores.

– Guarantee cover percentages vary based on loan amounts, ranging from 100% for loans up to Rs. 1 crore to 60% for loans exceeding Rs. 5 crores.

– SC entrepreneurs or their promoted entities must approach MLIs/Banks for loan application, and MLIs/Banks can avail the guarantee under CEGSSC.

Eligibility Criteria for Guarantee Cover

– Registered Companies, Societies, and Partnerships with more than 51% SC shareholding are eligible.

– No collateral security is required for obtaining loans from Banks under the scheme.

Guarantee Period and Fees

– Guarantee period spans a maximum of 7 years or the repayment period, whichever is earlier.

– Annual renewal fees for Banks/MLIs range between 0.20% to 0.75% depending on the loan amount, with reduced fees for SC women and SC divyang entrepreneurs.

Member Lending Institutions (MLIs)/ Banks

A list of prominent MLIs/Banks, including State Bank of India, Bank of Baroda, Union Bank of India, and others, participate in the implementation of the scheme, contributing to the empowerment of Scheduled Castes in the entrepreneurial landscape.


This story has been sourced from PIB.


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