CGSSD — Credit Guarantee Scheme for Subordinate Debt

The Credit Guarantee Scheme for Subordinate Debt (CGSSD) is a government initiative by the Ministry of MSME to revive financially stressed micro, small, and medium enterprises. It provides a subordinate debt — essentially a quasi-equity instrument — to promoters of MSMEs whose accounts have been classified as Non-Performing Assets (NPAs) or are otherwise stressed. The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) backs 90% of this debt, drastically lowering the risk for lenders. Promoters contribute the remaining 10% and use the funds to infuse into their company, restoring its financial health. Once the business revives, the MSME can resume normal banking relationships. Importantly, the government does not take any equity stake; the support is purely a guaranteed loan. The scheme is always open, with no fixed deadline, and operates through CGTMSE's member lending institutions.

• 90% credit guarantee from CGTMSE on subordinate debt for stressed/NPA MSMEs
• Promoter contributes only 10% of the debt amount
• No equity taken by the government — purely a guaranteed loan
• Always open for applications (rolling deadline)
• Helps MSMEs revive and restore normal banking relationships
• Administered by Ministry of MSME through member lending institutions

Promoters of MSMEs that have been classified as stressed or NPA by their lending institution are eligible, provided the MSME has a viable revival plan. There is no restriction on industry, state, or entity type, but the applicant must be a promoter of the stressed MSME. While DPIIT and MSME registration are not explicitly required, the MSME must be officially recognized as such by the bank for classification as stressed or NPA.

CGSSD — Credit Guarantee Scheme for Subordinate Debt is open to startups at any stage. It is open to startups registered anywhere in India.

CGSSD — Credit Guarantee Scheme for Subordinate Debt accepts applications on a rolling basis — there is no fixed cut-off date, so eligible startups can apply at any time. Because rolling programmes can pause without notice, confirm the window is still open on the official site before you start.

CGSSD provides promoters of stressed MSMEs access to subordinate debt that they can infuse into their companies as quasi-equity. CGTMSE covers 90% of the credit guarantee, significantly reducing the lender's risk and making it possible for NPA-classified businesses to access funding. The promoter contributes just 10%, and on successful revival, the MSME can return to normal banking relations. No government equity stake is created.

CGSSD — Credit Guarantee Scheme for Subordinate Debt is offered by Ministry of MSME, a government body. As a government-backed debt / loan, it is publicly funded and open to eligible startups across India. You can verify current details and timelines on the provider's official website before applying.

Applications are processed through CGTMSE's member lending institutions (scheduled commercial banks). The promoter first assesses eligibility by ensuring the MSME is classified as stressed or NPA and prepares a viable revival plan. The promoter then approaches a member bank with the revival proposal. The bank evaluates the revival plan and, if satisfactory, submits a guarantee application to CGTMSE. CGTMSE issues a 90% credit guarantee. The promoter contributes the required 10% margin, and the funds are infused into the stressed MSME. There is no competitive selection — approval depends on the revival plan's viability and bank's assessment.

Before you apply to CGSSD — Credit Guarantee Scheme for Subordinate Debt, keep the following documents ready:

• A pitch deck or short business plan describing the problem, product and traction
• Company registration documents and PAN
• Founder identification (PAN / Aadhaar) and brief profiles
• Recent financial statements or projections
• Product details — a demo, prototype or working link if available

Exact requirements are confirmed on the official application portal — treat this as a preparation checklist.