Delhi Introduces Collateral-Free Loans for Small Enterprises

The Delhi government has started a scheme to provide collateral-free loans to small businesses and women entrepreneurs. As per the reports, the goal is to make it easier for small enterprises to access credit without pledging personal assets.

The scheme has an initial allocation of ₹5 crore in the FY26 budget. An additional Rs 50 crore will be added in phases through a partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

Loan Coverage Under the Scheme

Loans under the scheme have a guarantee structure to reduce risk for lenders:

• Small enterprises: Up to  ₹10 crore, 75% coverage by CGTMSE and 20% by the Delhi government.
• Women entrepreneurs and MSMEs promoted by Agniveers: Up to  ₹10 crore, 90% coverage by CGTMSE and 5% by the Delhi government.
• Micro enterprises: Up to  ₹5 lakh, 85% coverage by CGTMSE and 10% by the Delhi government.
• Loans between  ₹5 lakh and  ₹10 crore: 75% coverage by CGTMSE and 20% by the Delhi government.

This allows borrowers to receive up to 95% total guarantee coverage.

Sectors Covered Under the Scheme

The scheme will support businesses in manufacturing, services, retail, and education. CGTMSE, set up in 2000, currently works with 276 lending institutions and manages a total guarantee portfolio of more than ₹9.34 trillion.

In FY25, CGTMSE issued guarantees for 2.7 million loan accounts worth  ₹3.05 trillion. The scheme is to reduce dependence on collateral and make loans easier to obtain for micro and small enterprises.

Read More: Razorpay, NPCI and OpenAI Launch Agentic Payments Integrating AI with UPI Transactions!

Conclusion

The scheme provides a framework for small businesses and women entrepreneurs in Delhi to access loans with lower risk. The combination of government and CGTMSE support aims to improve credit availability and help businesses expand across different sectors.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.