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Ministry Of Social Justice and Empowerment

Credit Enhancement Guarantee Scheme For The Scheduled Castes

Scheduled Caste
Application Process
Documents Required
Frequently Asked Questions
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

  1. 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.
  2. To promote the financial inclusion of SC entrepreneurs and motivate them towards further growth of SC communities.
  3. To facilitate the economic development of SC entrepreneurs.
  4. 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.


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

  1. Cost to GOI:
  2. 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.
  3. Cost to MLIs:
    1. 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.
  4. The Guarantee obligation shall cease to exist as soon as theunderlying loan is repaid or the Guarantee validity period has expired, whichever is earlier.

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