CGFSSD
Credit Guarantee Fund Scheme for Skill Development
A government-backed guarantee that absorbs default risk on qualifying skill-development loans - so lenders can offer better pricing, longer tenors, and zero collateral to borrowers entering approved training programs.
Backed by
Ministry of Skill Development & Entrepreneurship, Govt of India
Guarantee coverage
Up to 75%
Max loan amount
₹7,50,000
Guarantee fee
0.50% p.a., borne by the lending institution
Official source: NCGTC - CGFSSD official page
How CGFSSD works.
01
Enrol
Student secures admission in an approved skill course.
02
Apply
Lakshya routes the loan application to an empanelled lender.
03
Guarantee
CGFSSD guarantee cover is activated - lender risk drops.
04
Disburse
Funds released to the training partner. Repayment is deferred during the moratorium.
05
Repay
EMI begins after the moratorium; interest is capped near the lender's RLLR + 1.5%.
Why CGFSSD matters.
- Collateral-free and third-party-guarantee-free up to ₹7.5 lakh
- Moratorium covers the course plus up to one year before repayment starts (interest still accrues)
- Sovereign guarantee de-risks the lender, enabling better loan pricing
- Interest capped near the lender's benchmark rate (around RLLR + 1.5%)
- Encourages formal skill financing for underserved youth
- Seamless integration with Lakshya's lending workflow - eligibility auto-routed
Who qualifies.
- 01Indian nationals admitted to an eligible course (no age bar under the revised scheme)
- 02Courses at ITIs, polytechnics, recognised schools/colleges, and NSDC / SSC / State Skill Mission training partners
- 03Loan disbursed through an empanelled NBFC / bank
- 04Borrower must not have an existing default on bureau records
Answered in plain language.
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