Credit Enhancement Guarantee Scheme For The Scheduled Castes
Credit Enhancement Guarantee Scheme for SCs gives banks a government guarantee of ₹15 lakh to ₹5 crore on loans to SC entrepreneurs — making it much easier for SC-owned businesses to get bank credit without requiring heavy collateral.
About This Scheme
Credit Enhancement Guarantee Scheme for SCs gives banks a government guarantee of ₹15 lakh to ₹5 crore on loans to SC entrepreneurs — making it much easier for SC-owned businesses to get bank credit without requiring heavy collateral.
Full official description
To encourage and promote entrepreneurship among the Scheduled Castes who are oriented towards innovations and growth technologies by supporting the Bank and Financial Institutions [designated as Members Lending Institutions (MLIs) for the Scheme], in the form of Credit Enhancement Guarantee (minimum Rs.0.15 crore and maximum Rs.5.00 crore) against Working Capital Loans, Term Loans or Composite Terms Loans granted by (Money Lending Institutions) MLIs to SC entrepreneurs.
Objective of the Scheme
- The scheme is an initiative that is implemented throughout the nation to enhance entrepreneurship among the Scheduled Caste who are motivated for innovation and growth of the technologies.
- To promote the financial inclusion of SC entrepreneurs and motivate them towards further growth of SC communities.
- To facilitate the economic development of SC entrepreneurs.
- To develop direct and indirect employment generation for the SC population in India.
Sector covered under Scheme
The borrower engaged in primary/ service/ manufacturing sector would be considered for financial assistance by MLIs.
Type of Borrower
Registered companies/ registered partnership firms having more than 51% shareholdings with Scheduled Caste promoters for the past six months having management control of the SC entrepreneurs/ promoters.
Society registered under the Society Act and carrying business in accordance with the general policy of Bank/ FIs, having above 51% shareholdings with Scheduled Caste members at least for six months having management control of the SC entrepreneurs/ promoters.
Sole Proprietorship firms of SC entrepreneurs/ individual SC entrepreneurs.
The Scheduled Caste promoters of companies are given preference ahead of the Registered partnership firms and Registered Societies.
The Scheduled Caste promoter/ partner/ members will not dilute his/ her/ their shareholding/ equity during the currency of the loan.
Lock-in Period
The guarantee cover will have a lock-in period of 12 months from the date of last disbursement. No claim made under the guarantee shall be entertained by IFCI if the account becomes NPA within the lock in period.
Loan
The term ‘Loan’ shall cover Working Capital Loan, Term Loan / Composite Term Loan granted to SC Enterprises by (Money Lending Institutions) MLIs.
Guarantee Fee and obligation of IFCI on theGuarantee
Cost to GOI: An upfront fee @1.5% flat (exclusive of applicable taxes) for initial set-up of thecorpus (the first such corpus announced being Rs.200 crore) for implementing the Scheme shall be paid by GOI to IFCI. Thereafter, annual maintenance fees @ 0.50% p.a. (exclusive of applicable taxes), shall be levied by IFCI on the aggregate Guarantee outstanding as on 31st March every year towards annual maintenance of the scheme, payable at the end of each year during the currency of the Scheme. The upfront fee of 1.50% shall be debited to NLA as soon as the Scheme becomes operational and the annual maintenance fees will be recovered by IFCI by debiting the NLA on 01st April every year on an annualised basis.
Cost to MLIs: Guarantee fee would be levied by IFCI (rates as per following table) on the guarantee cover provided for the First Year and then annual renewal fees of the outstanding Guarantee commitment/obligation, towards renewal of the Guarantee to be paid by MLIs at the beginning of each Financial Year, i.e. 01st April every year. In the event of non-payment of renewal fee by May 31st of that year or any other specified date, the guarantee under the scheme shall not be available to the lending institution/MLI unless IFCI agrees for the continuance of guarantee and the lending institutions/MLI pays penal interest on the renewal fee due and unpaid, with effect from the subsequent June 01, at four percent over IFCI Bench Mark Rate, per annum, or at such rates specified by IFCI from time to time, for the period of delay.
The Guarantee obligation shall cease to exist as soon as theunderlying loan is repaid or the Guarantee validity period has expired, whichever is earlier.
Benefits
- Guarantee cover: ₹15 lakh to ₹5 crore (individual: up to ₹1 crore)
- Tenure: Up to 7 years or loan repayment period
- Benefit: Banks lend more freely with government guarantee — less collateral needed
- Sector: Manufacturing, services, or primary sector
- Administered by: IFCI Ltd on behalf of Ministry of Social Justice
Who Can Apply (Eligibility)
SC entrepreneur or SC-owned enterprise in manufacturing, primary, or services sector. Individual SC entrepreneurs can get guarantee cover up to ₹1 crore; companies up to ₹5 crore.
How to Apply
Enter the details of the Enterprise details and other mandatory fields Enter the details of the Borrower details and other mandatory fields. The applicant will fill Loan and Bank details and other mandatory fields. Save and Upload the requested documents Submit the document
Frequently Asked Questions
What types of sectors does the scheme cover?
The borrower engaged in Primary/Manufacturing/Service sector may be considered for financial assistance by MLIs.
I am a transgender, am I eligible for the course?
Yes, The scheme has no gender restrictions.
Which type of borrowers can be covered under the scheme?
Registered Companies and Societies/Registered Partnership Firms/Sole Proprietorship firms/Individual SC Entrepreneurs having more than 51% shareholding by Scheduled Caste entrepreneurs/promoters/members with management control for the past 6 months engaged in the manufacturing and services sector are cover under the Scheme.
Whether Individual and Sole Proprietorship firms are eligible to for the coverage under the scheme?
Yes, an individual is covered in the scheme.
Whether One Person company firms are eilgible to for the coverage under the scheme?
Yes, Registered companies including One Person Companies are eligible to be covered under the scheme.
Whether the borrower can approach any bank to get the coverage in the scheme?
No, Only the banks who have signed the undertaking for the scheme to become a member of the scheme known as Member Lending Institution (MLI) are allowed to get benefits of the scheme for their borrowers. The list of MLIs along with their Nodal Officers for the scheme is available on the IFCI's website, i.e. ifciltd.com and also on portal of the scheme, i.e. https://ifcicegssc.in
Whether working capital laon is eligible to be covered under the scheme?
Yes. The term "Loan" shall cover Working Capital Loan, Term Loan/Composite Term loan granted to SC Enterprises by MLIs is covered under the scheme
What is the collateral security required to be given for the loan availed under the scheme?
No Collateral security is required for the loan availed in the scheme.
Whether third party guarantee is required for the loan availed under the scheme?
No, Third party Guarantee is not required for the loan availed in the scheme.
What is the maximum quantum of loan provided in the scheme?
There is no restriction on the quantum of loan that a bank can sanction in the scheme. However, guarantee cover under the scheme will be minimum for Rs.0.15 crore and maximum Rs.5.00 crore.
What are the kind of documentation required for the bank to become a MLI?
An undertaking needs to be signed by the Bank to become MLI.
What is the rate of interest that will be charged to the borrowers for loans covered under the scheme?
The rate of interest admissible on the loans covered under the scheme will be per the interest rate policy of the MLI and will be linked to base rate of the MLI subject to maximum interest rate charged by MLI will not be more than 3% over and above the base rate of the MLI.
What is the maximum tenure of the guarantee cover in the scheme?
The maximum tenure of the guarantee cover may be upto 7 years or loan repayment period whichever is earlier. However, initially the loan shall be guaranteed for 1 years and renewed at yearly intervals.
Ready to apply?
Visit the official government portal to apply for this scheme.
Apply on myScheme.gov.inDocuments Required
- Documentary proofs of being SC will have to be mandatorily submitted by the entrepreneurs/promoters/partners/society members/ sole proprietorship firms/individual SC Entrepreneur at the time of submitting the proposals;