Delhi Govt: Collateral-Free Loans for Entrepreneurs

New Delhi, Oct 8 (PTI) The Delhi government has partnered with the Credit Guarantee Fund Trust for Micro and Small Enterprises to provide collateral-free loans to small entrepreneurs, officials said on Wednesday.

Delhi Chief Minister Rekha Gupta said this partnership will mark a new chapter in Delhi's economic growth, benefitting thousands of entrepreneurs.

Gupta said that under this scheme, small entrepreneurs will be able to access loans without having to pledge any collateral. The loan guarantee provision under this scheme is shared jointly between the Delhi Government and Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

According to the proposed guarantee structure, borrowers from different categories will be provided with guarantee coverage of up to 95 per cent, an official statement said.

For small enterprises, loans of up to Rs 10 crore will receive 75 per cent coverage from CGTMSE and 20 per cent from the Delhi Government, it said.

For women entrepreneurs and MSMEs promoted by Agniveers, loans of up to Rs 10 crore will receive 90 per cent coverage from CGTMSE and 5 per cent from the Delhi Government. For micro enterprises, loans up to Rs 5 lakh will receive 85 per cent coverage from CGTMSE and 10 per cent from the Delhi Government.

Additionally, for loans between Rs 5 lakh and Rs 10 crore, 75 per cent coverage will be provided by CGTMSE and 20 per cent by the Delhi Government. In this way, total coverage for all will reach 95 per cent.

The CGTMSE was established in 2000 by the Ministry of Micro, Small and Medium Enterprises and the Small Industries Development Bank of India (SIDBI).

The institution provides guarantees to banks and other financial institutions to enable small enterprises to access loans without collateral.

The scheme will cover sectors including manufacturing, services, retail, and education. The Chief Minister also noted that a provision of Rs 5 crore has been made for this scheme in the financial year 2025-26 budget. Additionally, a phased contribution of Rs 50 crore is expected to be added under this scheme in partnership with CGTMSE.

Gupta emphasised that this Delhi Government initiative will empower micro and small enterprises while strengthening the city's economic framework.

CGTMSE currently operates with 276 member lending institutions across the country, with a total guarantee portfolio exceeding Rs 9.34 lakh crore. In the financial year 2025 alone, it issued guarantees for 27 lakh loan accounts, amounting to Rs 3.05 lakh crore.