Delhi Govt announces collateral free loans up to Rs 10 cr for small businesses

Industry Minister Manjinder Singh Sirsa and senior officials from departments concerned were present on the occasion. Highlighting the role of the CGTMSE, the Chief Minister said it had emerged as a trusted national institution facilitating collateral free credit for micro and small enterprises.

She said lakhs of young people in Delhi aspire to launch ventures in manufacturing, services and allied sectors but often struggle due to the lack of financial support. Following the signing of the MoU, such entrepreneurs would now be able to access loans of up to Rs. 10 crore without furnishing any collateral.

Explaining the operational framework of the Delhi Credit Guarantee Scheme, the Chief Minister said the loan guarantee responsibility will be jointly shared by the Delhi Government and CGTMSE. While CGTMSE will provide a guarantee cover of 75 to 90 per cent of the loan amount, the remaining portion will be secured by the Delhi Government.

As a result, up to 95 per cent of the loan amount will be government guaranteed, reducing banks exposure to just 5 per cent and enabling them to lend more confidently to small enterprises.

The scheme will cover a wide range of sectors, including manufacturing, services, retail, education and skill training institutions. A dedicated fund of Rs 50 crore has been created, which will enable banks to extend loans amounting to nearly Rs. 2,500 crore. The fund may be enhanced in future if required.

The Chief Minister said the scheme has been designed with a leverage ratio of 50:1, meaning that an investment of Rs 2 crore can facilitate loans worth up to Rs 100 crore. An NPA ceiling of 10 per cent has also been fixed to limit the government’s fiscal risk.

The government initially aims to reach one lakh beneficiaries, though the CGTMSE has clarified that there will be no cap on the number of eligible entrepreneurs.

Emphasising inclusive growth, the Chief Minister said special support will be extended to first-time and women entrepreneurs. She added that the collaboration between CGTMSE and the Delhi Government is a strong step towards inclusive economic development and a developed Delhi.

Describing the initiative as transformative, Industry Minister Manjinder Singh Sirsa called the provision of collateral-free loans of up to Rs 10 crore “a game changer”, stating that the government’s objective was not just credit disbursal but empowering MSMEs for long-term expansion.