Delhi govt partners with CGTMSE to provide collateral-free loans to small enterprises

With a view to empowering micro and small enterprises, the Delhi government has partnered with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

The collaboration will help small entrepreneurs access loans without collateral while reducing risks for the banks.

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According to Chief Minister Rekha Gupta, this partnership will mark a new chapter in Delhi’s economic growth, benefitting thousands of entrepreneurs.

The CM said that under this scheme, small entrepreneurs will be able to access loans without pledging any collateral, and the loan guarantee provision under this initiative is shared jointly between the state government and CGTMSE.

According to the proposed guarantee structure, borrowers from different categories will be provided with guarantee coverage of up to 95 per cent.

For small enterprises, loans of upto Rs 10 crore will receive 75 per cent coverage from CGTMSE and 20 percent from the Delhi government.

In case of women entrepreneurs and MSMEs promoted by Agniveers, loans of upto Rs 10 crore will receive 90 percent coverage from CGTMSE and 5 per cent from the Delhi government.

For micro enterprises, loans of upto Rs 5 lakh will receive 85 percent coverage from CGTMSE and 10 per cent from the Delhi government, and additionally, for loans between Rs 5 lakh and Rs 10 crore, 75 per cent coverage will be provided by CGTMSE and 20 per cent by the Delhi government.

In this way, total coverage for all will reach 95 per cent, the officials said.

The CM highlighted the background of this decision, noting that CGTMSE was established in 2000 by the Ministry of Micro, Small and Medium Enterprises, Government of India, 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.

The scheme will cover sectors, including manufacturing, services, retail, and education. The CM also noted that a provision of Rs 5 crore has been made for this scheme in the financial year 2025-26 budget.

Additionally, a phased contribution of Rs 50 crore is expected to be added under this scheme in partnership with CGTMSE.

Gupta emphasised that this initiative will empower micro and small enterprises while strengthening the city’s economic framework.