Credit Enhancement Guarantee Scheme for The Scheduled Castes

Credit Enhancement Guarantee Scheme for The Scheduled Castes is a central government scheme that helps entrepreneurs from the Scheduled Caste community get business loans more easily. It gives a credit guarantee to banks and financial institutions (called Member Lending Institutions or MLIs) covering working capital and term loans given to SC-led businesses. As of 2026, the scheme continues to support working capital, term loans and composite term loans from ₹0.15 crore up to ₹5.00 crore.

This scheme was announced in the Union Budget of 2014-15 under the social sector work of the Ministry of Social Justice and Empowerment. It began with a starting fund of ₹200 crore. IFCI Ltd is the nodal agency that issues the guarantee to banks. The idea is simple: when a bank gets a guarantee cover, it feels safer lending to SC entrepreneurs, which in turn helps more businesses start and grow across the country.

Credit Enhancement Guarantee Scheme for The Scheduled Castes - Introduction

This scheme works as a financial safety net for banks. When an SC entrepreneur takes a loan for business, the bank can get a Credit Enhancement Guarantee under the scheme. This guarantee stands behind the loan in place of traditional collateral, so the entrepreneur does not need to pledge property or other security.

The guarantee cover depends on the loan amount. For loans from ₹0.15 crore to ₹1 crore, the bank gets 100% guarantee cover. For loans from ₹1 crore to ₹2 crore, the cover is 80%. For loans from ₹2 crore to ₹5 crore, the cover is 70%. For loans above ₹5 crore, the cover is 60%, up to a maximum guarantee of ₹5 crore.

So, the scheme helps new and growing businesses get funds without heavy collateral. It also encourages a habit of timely repayment, because a good repayment record can lead to repeat credit enhancement later. The main aim is to build confidence among SC entrepreneurs and push them toward profitable and job-creating businesses.

Key Information

Benefits

This scheme removes the biggest hurdle for most small businesses, which is the need for collateral. Instead of pledging property, the entrepreneur gets the guarantee cover that helps the bank say yes to the loan.

No collateral security is needed for loans taken under this scheme. There is also no third-party guarantee. This makes it easier for first-time SC entrepreneurs to enter business without putting their family property at risk.

Eligibility

To get benefit under this scheme, the business must belong to Scheduled Caste promoters. The following are eligible to apply:

• Registered companies and societies, registered partnership firms, sole proprietorship firms and individual SC entrepreneurs.
• The company, firm or society must hold more than 51% shareholding by Scheduled Caste promoters or members with management control for at least 6 months.
• The business can run in the primary, manufacturing or service sector, and startups led by SC entrepreneurs are also covered.
• The shareholding percentage should not fall below 51% during the loan period, and a valid SC certificate must be submitted.

Application Process

Application is done online through the official CEGSSC portal. The steps are laid out below for easy following.

STEP 1 - Go to the official portal at www.ifcicegssc.in and open the application form for new applicants.

STEP 2 - Fill in the business and personal details exactly as asked, including the loan amount and purpose.

STEP 3 - Provide the loan and bank details so the system can map the application to a Member Lending Institution.

STEP 4 - Upload the required documents in the format asked, such as the SC certificate and registration papers.

STEP 5 - Review the filled form, then submit it and note down the application reference number for future tracking.

Documents Required

Before starting the application, keep these documents ready so the process is smooth.

• Valid documentary proof of Scheduled Caste status.
• Registration certificates of the company, firm or society.
• Proof of more than 51% SC shareholding and management control for the last 6 months.
• Financial statements and any other documents asked by the lending bank.

Definitions

Credit Enhancement

Credit Enhancement is a way to improve the credit worthiness of a borrower. In this scheme it works as a third-party guarantee that stands in place of property collateral, giving lenders the confidence to approve loans. It goes well with related business support such as the Term Loan Scheme for Scheduled Caste entrepreneurs.

References

Official Scheme Page - Ministry of Social Justice and Empowerment

Official Scheme Guidelines PDF

Scheme Details Document PDF

FAQ's

Which sectors are covered by this scheme?

Businesses in the primary, manufacturing and service sectors are covered, as long as they are promoted and run by SC entrepreneurs.

Are transgender individuals eligible for this scheme?

Yes, there is no gender-based restriction. Anyone meeting the SC eligibility criteria can apply.

Can an individual or a one-person company apply?

Yes, individual entrepreneurs, sole proprietorships and one-person companies are all eligible for guarantee cover.

Do I need to provide collateral for this loan?

No collateral security is required for loans taken under this scheme.

Is a third-party guarantee required?

No, there is no requirement for any third-party guarantee.

How is the interest rate decided?

The lending bank sets the rate based on its policy, but it should not be more than 3% above the bank's base rate. Check the current base rate with the specific branch.

How can I find a participating bank?

Approach only those banks that are Member Lending Institutions (MLIs) under the scheme. The list of authorized banks is available on the official CEGSSC portal.