Delhi govt may wind up its lending agency DFC due to mounting losses

The Delhi government may wind up its lending agency DFC in view of its "financial sickness and mounting losses", officials said on Saturday.

The Delhi Financial Corporation (DFC), which provides loans to medium, small and micro projects, has been facing "financial constraints" for long, they said.

The corporation used to extend financial assistance to restaurants, hotels, amusement parks, other tourism-related activities, construction of commercial complexes, multiplexes, hospitals, nursing homes, clinics, diagnostic centres and commercial vehicles among others.

Its board of directors, in a meeting in November last year, held detailed deliberations, taking a serious note of the "acute financial constraints" currently faced by the corporation. It was apprised to the board that the share capital has already been eroded and the losses have accumulated to ₹42 crore.

 

The corporation was also not in a position to repay the total outstanding loan of ₹80 crore it owed to the Delhi government as of September 2025.

Further, the corporation's entire capital base and reserves were completely eroded and its net worth showed a negative growth of ₹15 crore, official documents showed.

So much so, the corporation, in an order issued last month, discontinued its medical scheme, effective from January 1, 2026.

The DFC, established in April 1967 under the State Financial Corporation's Act 1951, had been playing vital role in promotion and development of micro, small and medium enterprises (MSMEs) and the service sector in the national capital.

However, it ceased its primary lending function with no loans disbursed in 2023-24, failing to generate new business, documents showed.

Last year, the Delhi government directed the Finance Department to present a note on the financial situation of the DFC for consideration and decision by the Cabinet.

Officials said the government may wind up the corporation in view of the losses and little chances of its resurrection by waiving off the outstanding ₹80 crore loan owed by it.