Lok Sabha Question No. 1757 (UNSTARRED), answered on 2021-12-08
Subject: CSAS
Ministry: COMMERCE AND INDUSTRY
Asked by: Dibyendu Adhikari

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

## 1757.  SHRI DIBYENDU ADHIKARI:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state:

## वाणिज्य  एवं उद्योग मंत्री

- (a) the number of startups that have availed the Covid-19 Startup Assistance Scheme (CSAS) from January, 2020 to October 31, 2021;
- (b) the quantum of loans provided to startups under the aforementioned scheme from January, 2020 to October 31, 2021;
- (c) the current interest rate applicable to loans provided under the scheme;
- (d) whether the Government is likely to reduce this interest rate or provide subsidies in the future; and
- (e) if so, the details thereof and if not, the reasons thereto?

## ANSWER

## वाणिज्य एवं उद्योग मंत्रालय में राज्य मंत्री ( श्री सोम प्रकाश ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI SOM PARKASH)

- (a) & (b): Covid-19  Startup  Assistance  Scheme  (CSAS)  was  launched  by  Small Industries Development Bank of India (SIDBI) on 6th April 2020 for a limited period of 30 days, to aid innovative startups that have demonstrated ability to adapt to economic impact from Covid-19 and ensured their employees' safety and financial stability. The Scheme was launched throughout the country, for Government defined Start-ups, based on the eligibility criteria detailed in the CSAS Scheme document which is at Annexure-I .

Under  this  scheme,  an  aggregate  amount  of  Rs.  21.68  crore  has  been sanctioned to 14 nos. of startups.

- (c) to (e) : The CSAS scheme was launched by SIDBI on 6th April, 2020 for a limited period of 30 days only, after which the acceptance of applications under the said  scheme  was  closed  .  Currently,  no  loan  is  being  provided  under  the CSAS.

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UNSTARRED QUESTION NO. 1757.

TO BE ANSWERED ON WEDNESDAY, THE 8 TH  DECEMBER, 2021.

## CSAS

## Context

COVID-19  pandemic  has  impacted  the  entire  economy  and  the  startup ecosystem  is no  exception.  SIDBI  recognizes  the  operational  and  financial challenges being faced  by  the  start-ups  and  endeavors  to  provide  financial assistance  and  stability  via  its  scheme  viz. Covid-19  Startup  Assistance Scheme ('CSAS'). This scheme will provide  assistance to innovative startups that have demonstrated ability to adapt to economic impact from Covid-19 and ensured its employees safety and financial stability.

## Scheme and Process

CSAS aims to provide assistance to startups that will directly benefit from the scheme.  The objective of the Scheme is to provide quick working capital in the next 45  to  90  days  to  the  Start-ups.  Therefore,  for  a  faster  processing  a Recommendation  Committee comprising of 5 members (3 from SIDBI and its nominees and 2 from Venture Capital Industry) will be created. The process followed for screening by the  application shall be as follows:

1. The Scheme document shall be available on SIDBI portal.
2. An  application  cum  Credit  Appraisal  Memo  (CAM)  along  with  Self Assessment Tool (SAT) shall be made available on the SIDBI portal.
3. Start-ups are required to fill the CAM, SAT, and submit the documents to a designated  email  id  (csas@sidbi.in),  within  15  days  of  launch  of  the Scheme.
4. The Recommendation Committee will run a process, which will include a credit  evaluation, Video Conference with the startup and VC Investor.
5. Thereafter proposed Internal Credit committee of SIDBI (ICC) will hold a weekly  meeting to approve loans to Startups. During the ICC meetings, the Startups along with the VC Investor may be required to be available for a Video  Conference meeting.
6. Approval or rejection will be communicated on the same day by email.
7. The Loan Agreements and related documentation will be completely digital.

The Scheme will be launched all throughout the country, for Government defined Start-ups, based on the eligibility criteria detailed in the Scheme.

## ANNEXURE

## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  &  (b)  OF  THE  LOK SABHA UNSTARRED QUESTION NO. 1757 FOR ANSWER ON 08.12.2021.

## COVID-19 STARTUP ASSISTANCE SCHEME (CSAS)

## The broad parameters of the Scheme are given below:

| Name of the Scheme     | Covid-19 Startup Assistance Scheme (CSAS)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Type of Facility       | WCTL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Purpose                | To provide interim support to startups whose cash flow and liquidity has been adversely impacted by the Covid-19 pandemic. Theassistance can be used for various working capital requirements like salaries / wages, rent,administrative expenses, payment to vendorsetc. The loan may also be considered against the GST refund.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Tenor of the Loan      | Upto 36 months including maximum moratorium period of 12 months. Loan to be repaid in max 24 instalments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Loan Amount            | Not more than INR 2 Crores per Start-up                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Eligible Beneficiaries | Eligibility criteria for startups: I. Government defined Start-ups which has received funding through Alternate Investment Fund registered with SEBI or by any VC / PE / Angel Fund investing in startupsin India. II. Startups with a minimum employee base of50 employees. This may also include the foot soldiers. III. Startups having FY 2019 and FY 2020 minimum turnover between INR 20 crore toINR 60 crore IV. Startups should be EBITDA positive in December 2019. If not, they should be in a position to project positive EBITDA for the quarter ending June 2020. V. Startup should have been incorporated for less than 10 years VI. Startups should have a positive Net Worth VII. Startups should have demonstrated innovative measures for ensuring business continuity during the Covid - 19 period. VIII. Startups should have taken adequate measures and ensured employee safety andtheir financial stability IX. Promoter / Founder of startup should have invested his own capital in the business The below category is not eligible I. Written off Startups by AIFs |

|                               | II. Startups who are in Stress usually other than the present Covid-19 (as recommended by the Fund Manager) III. Startups who do not have strong IntellectualProperty or Innovative IV. Startups having working capital facilities withany Bank.                                                                                                                                   |
|-------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Insurance for Employees       | Each loan to the Start-ups will carry the followingInsurance. 1. Key Man insurance assigned to SIDBI. 2. All employee term Insurance upto 10 lakhs. Cost of premium shall be borne in following pattern:50% by SIDBI 25% by the Investor Fund25% by the Startup The share of startup may be apportioned in the loandisbursement amount.                                            |
| Margin/Promoters Contribution | NIL                                                                                                                                                                                                                                                                                                                                                                                |
| Rating                        | Not Applicable                                                                                                                                                                                                                                                                                                                                                                     |
| Security                      | Mandatory Security:  First Pari-Passu charge on current assets of theCompany  Keyman Insurance to the extent of facility amount disbursed to secure the facility Additional Security, if available:  Hypothecation of movables of the company.  Pledge of Intellectual Property  Pledge of Promoter shares  Personal Guarantee of Promoters  GSTRefund (if any)             |
| Interest rate                 | 12% p.a. reducing balance                                                                                                                                                                                                                                                                                                                                                          |
| Disbursement Mechanism        | Need based single / multiple tranche                                                                                                                                                                                                                                                                                                                                               |
| Share Warrant Option          |  At any time, during the currency of the WCTL,SIDBI will have the right to subscribe upto 2% ofthe share capital of the Company 'at par' and asper the terms of Share Warrant Agreement.  The Company will not change the share capital structure of the company without prior approval of SIDBI. Approval for any change in share capital structure may be granted on terms and |

|                               | conditions considered appropriate for safeguarding SIDBI's interest under Warrant Agreement.                                                                                                                                                                                                                                                           |
|-------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Processing Charges            | 2% of the sanction amount                                                                                                                                                                                                                                                                                                                              |
| Prepayment Charges            | As applicable                                                                                                                                                                                                                                                                                                                                          |
| Penal Interest                | Default interest rates would apply on every overduefacility and would be applicable on the entire defaulted amount (principal and/or interest). The penal interest rate on defaulted accounts would be 2% per month on overdue facility.                                                                                                               |
| Conversion in case of Default | In case of default in repayment / payment of principal or interest installment(s) continuing for more than 180 days, then SIDBI will have the rightto convert that defaulted installment(s) along with its accrued interests, penal interests and all other costs and charges (either in full or in part) into equity capital of the Company 'at par'. |
| Legal Documentation           | As per the facility and security provided                                                                                                                                                                                                                                                                                                              |
| Recommendation Committee      | Recommendation Committee to be set up by SIDBI.                                                                                                                                                                                                                                                                                                        |
| Sanctioning Authority         | Internal Credit Committee to be set up by SIDBI.                                                                                                                                                                                                                                                                                                       |
| Source of Fund                | SIDBI's Balance Sheet as SIDBI will directly provide the facility to start-up.                                                                                                                                                                                                                                                                         |

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