Scheme enables small enterprises to access loans without pledging any collateral.
Delhi partners with Credit Guarantee Fund to cover up to 95% loans.
Initiative aims to boost entrepreneurship, job creation and local economic growth.
The Delhi government and Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) have partnered to provide collateral-free loans to small entrepreneurs, officials told PTI on October 8.
The scheme will cover sector including manufacturing, services, retail, and education. Provision of ₹5 crore has been made for this scheme in the financial year 2025-26 budget. Additionally, a phased contribution of ₹50 crore is expected to be added under this scheme in partnership with CGTMSE.
Delhi Chief Minister Rekha Gupta said that small entrepreneur will be able to access loans without having to pledge any collateral under this scheme. The loan guarantee provision under this scheme is shared jointly between the Delhi Government and CGTMSE.
How Loan Guarantees Work
According to the proposed guarantee structure, borrower from different categories will be provided with guarantee coverage of up to 95%, an official statement said.
For small enterprises, loans of up to ₹10 crore will receive 75% coverage from CGTMSE and 20% from the Delhi Government, it said.
For women entrepreneur and MSMEs promoted by Agniveers, loans of up to ₹10 crore will receive 90% coverage from CGTMSE and 5% from the Delhi Government. For micro enterprises, loans up to ₹5 lakh will receive 85% coverage from CGTMSE and 10% from the Delhi Government.
In addition, for loans between ₹5 lakh and ₹10 crore, 75% coverage will be provided by CGTMSE and 20% by the Delhi government. In this way, total coverage for all will reach 95%.
Empowering Small Businesses
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.
Delhi Chief Minister 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 ₹9.34 lakh crore. In the financial year 2025 alone, it issued guarantees for 27 lakh loan accounts, amounting to ₹3.05 lakh crore.
According to The New Indian Express, this initiative aligns with the Delhi government’s broader strategy to foster economic growth by supporting small enterprises. The programme seeks to encourage entrepreneurship and job creation in the city by lowering the cost barriers to credit availability. By utilising their vast network to empower individual entrepreneurs and support Delhi's overall economic development, the partnership with CGTMSE expands the programme's legitimacy and reach.
(With inputs from PTI.)
