The Delhi Government has joined hands with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to make it easier for small entrepreneurs to access loans without pledging collateral.
The move aims to strengthen the Capital’s Micro and Small Enterprise (MSE) sector by reducing lending risks for banks and boosting job creation.
Chief Minister Rekha Gupta called the partnership a major step toward inclusive economic growth.
“This collaboration will mark a new chapter in Delhi’s economic story. Thousands of small business owners will now be able to expand their ventures without the burden of collateral,” she said.
Under the new scheme, loans will be guaranteed jointly by the Delhi Government and CGTMSE, with total guarantee coverage reaching up to 95 per cent depending on the borrower’s category. The model is designed to provide financial confidence to lenders while giving entrepreneurs easier access to credit.
For small enterprises, loans up to `10 crore will receive 75 per cent coverage from CGTMSE and 20 per cent from the Delhi Government. For women entrepreneurs and MSMEs promoted by Agniveers, loans up to `10 crore will get 90 per cent coverage from CGTMSE and five per cent from the Delhi Government.
Micro enterprises will get enhanced support, loans up to `5 lakh will have an 85 per cent guarantee by CGTMSE and 10 per cent by the Delhi Government. Loans between `5 lakh and `10 crore in this category will also get a combined coverage of 95 per cent.
Officials said the partnership will not only expand credit access but also encourage risk-taking and innovation among small business owners. The scheme will apply to sectors including manufacturing, services, retail and education, which form the backbone of Delhi’s local economy.
Highlighting the background of the initiative, the Chief Minister said CGTMSE was set up in 2000 by the Ministry of Micro, Small and Medium Enterprises (MSME) and the Small Industries Development Bank of India (SIDBI).
The trust provides credit guarantees to banks and financial institutions, helping small entrepreneurs get loans without security. Currently, CGTMSE works with 276 member lending institutions and manages a guarantee portfolio of more than `9.34 lakh crore.
In the 2025 financial year alone, it issued guarantees worth `3.05 lakh crore across 27 lakh loan accounts. To support the rollout in Delhi, a budget provision of `5 crore has been made for 2025–26. The Government also plans to add `50 crore in phases under its partnership with CGTMSE, allowing for sustained guarantee coverage over time.
The CM said the scheme is expected to give a strong push to entrepreneurship, particularly for first-time business owners and women-led enterprises.
“We want to ensure that financial constraints don’t stop people from turning their ideas into reality. This partnership will open doors for thousands of micro and small enterprises to grow and generate employment,” she said. The initiative is part of the Delhi Government’s larger effort to build a more resilient and inclusive urban economy.
By encouraging self-employment and innovation, officials expect the collaboration to create a ripple effect across industries, from small manufacturing units to service startups and educational ventures.
The Government believes that by easing credit access and sharing lending risks, this scheme will not only empower small entrep-reneurs but also help stabilise Delhi’s post-pandemic economy.
As the Chief Minister summed up, “When small businesses grow, Delhi grows. This partnership is a promise to stand with every entrepreneur who dares to dream big.”