Delhi launches Rs 55 cr collateral-free loan scheme for small businesses

Scheme will also serve women entrepreneurs and help economic growth, says state government

The Delhi government has started a scheme to provide collateral-free loans to small businesses and women entrepreneurs, aiming to strengthen the national capital’s economic growth.

 

Delhi’s FY26 Budget had allocated Rs 5 crore for the scheme and an additional phased contribution of Rs 50 crore is expected in partnership with Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

 

The scheme will help small enterprises and women entrepreneurs access credit without the burden of collateral, according to a statement by Chief Minister Rekha Gupta.

 

How the scheme works

According to news agency PTI, the scheme offers a guarantee coverage structure that reduces lenders’ risk and enables easier access to funds for small businesses. Coverage levels vary by category:

 

Small enterprises: Loans up to Rs 10 crore, 75 per cent coverage by CGTMSE and 20 per cent by the Delhi government.

 

Women entrepreneurs & MSMEs promoted by Agniveers: Loans up to Rs 10 crore, 90 per cent coverage by CGTMSE and 5 per cent by Delhi government.

 

Micro enterprises: Loans up to Rs 5 lakh, 85 per cent coverage by CGTMSE and 10 per cent by Delhi government.

 

Loans between Rs 5 lakh and Rs 10 crore: 75 per cent coverage by CGTMSE and 20 per cent by Delhi government.

 

This ensures that borrowers across categories can receive up to 95 per cent total guarantee coverage, significantly reducing the lending risk.

 

For small entrepreneurs, especially startups and micro businesses, collateral has often been a major barrier to borrowing. This scheme could:

 

Reduce dependence on personal assets for loans.

Improve access to working capital and growth financing.

 

Encourage women entrepreneurs and defence veterans to start and expand businesses.

 

Gupta said the scheme is “a new chapter in Delhi’s economic growth” and will empower micro and small enterprises and strengthen the city’s economic framework.

 

Budgetary allocation and scope

 

The scheme will cover sectors such as manufacturing, services, retail, and education.

 

CGTMSE, which was established by the central government in 2000, works with 276 lending institutions and has a guarantee portfolio of more than Rs 9.34 trillion. In FY25, it issued guarantees for 2.7 million loan accounts worth Rs 3.05 trillion.

 

(with inputs from PTI)