Delhi Govt, CGTMSE Launch ₹10 Cr Collateral-Free Loan Scheme for Entrepreneurs

Delhi has launched a new collateral-free loan scheme for small entrepreneurs, offering up to ₹10 crore in credit through a government-backed guarantee program. The initiative, announced on January 28, 2026, aims to boost startups, traders, and micro-enterprises by removing barriers to financing.

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) plays a crucial role in enabling collateral-free loans for India’s MSMEs by providing credit guarantees to banks and financial institutions. This reduces the risk for lenders and makes it easier for small businesses and startups to access formal credit.

In the Delhi Government’s collateral-free loan scheme for small entrepreneurs, the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) plays the central role of providing the primary credit guarantee.

CGTMSE covers 75–90% of the loan amount extended by banks/NBFCs to small entrepreneurs under this scheme. By absorbing most of the risk, CGTMSE makes lenders more confident in disbursing loans without collateral.  

The Delhi Government steps in to provide the remaining guarantee coverage (10–25%), ensuring that 100% of the loan is backed. The scheme is implemented through a Memorandum of Understanding (MoU) between the Delhi Government and CGTMSE, making it a joint guarantee framework.  

Key Highlights of the Scheme

• Loan Amount: Up to ₹10 crore available for small entrepreneurs, startups, and traders.
• Collateral-Free: No need to pledge property or assets.
• Guarantee Structure: Centre (CGTMSE) covers 75–90% of the loan; Delhi Government provides the remaining guarantee.
• Launch Date: Announced on January 28, 2026 by Delhi Chief Minister Rekha Gupta.
• Partnership: Implemented through MoU between Delhi Government and CGTMSE.

Objectives

• Support Innovation: Encourage startups and new ventures in Delhi.
• Job Creation: Generate employment opportunities by easing access to capital.
• Inclusive Growth: Ensure small businesses and traders can expand without financial roadblocks.

Benefits for Entrepreneurs

• Reduced Risk: Entrepreneurs don’t need to risk personal or family assets.
• Access to Larger Loans: Higher credit limits compared to traditional schemes.
• Government Backing: Stronger trust between banks and borrowers due to dual guarantees.
• Focus on Growth: Businesses can channel funds into expansion, innovation, and hiring.

Potential Challenges & Considerations

• Bank Procedures: Entrepreneurs must still meet eligibility and documentation requirements.
• Creditworthiness: Banks may scrutinize business plans and financial viability more closely.
• Awareness & Outreach: Success depends on effective promotion among small entrepreneurs.

Comparison with Other Schemes

Feature	Delhi Credit Guarantee Scheme	National CGTMSE Scheme
Loan Limit	Up to ₹10 crore	Typically up to ₹2 crore
Guarantee Coverage	75–90% (Centre) + Delhi Govt	75–85% (Centre only)
Target Audience	Delhi-based entrepreneurs, startups, traders	MSMEs nationwide
Collateral Requirement	None	None

This scheme is a major boost for Delhi’s entrepreneurial ecosystem, especially for startups and small businesses struggling with access to capital.

To recall, Delhi government recently announced Startup Policy with ₹325 crore outlay over 5 years to support 5,000 Startups by 2035.