Delhi Chief Minister Rekha Gupta spearheaded the signing of a Memorandum of Understanding (MoU) with a Central lending agency to offer city investors loans up to Rs 10 crore without the need for collateral. This move aims to bolster small and micro enterprises in the national capital. The MoU, inked between the Delhi Government and the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), marks a significant step towards enhancing the business environment in Delhi.
The primary goal of the scheme is to assist small entrepreneurs in securing loans without the requirement of collateral or security, as highlighted by the Chief Minister. By facilitating easier access to capital for entrepreneurs, the initiative also aims to reduce the risk for banks, encouraging them to lend to small businesses more readily. This strategic move is anticipated to foster innovation, create employment opportunities, and contribute to building a more inclusive urban economy in Delhi.
CM Gupta emphasized that the MoU will enable micro and small entrepreneurs to access credit effortlessly without the burden of collateral. The scheme will particularly benefit first-time entrepreneurs and women entrepreneurs, encouraging broader participation in entrepreneurial endeavors. Under the Delhi Credit Guarantee Scheme, the responsibility for loan guarantees will be shared by the Government of Delhi and CGTMSE, with CGTMSE providing a guarantee cover of 75 to 90 percent of the total loan amount.
Explaining the operational framework of the scheme, the Chief Minister detailed that the scheme will encompass various sectors such as manufacturing, services, retail, education, and skill-training institutions. A dedicated fund of Rs 50 crore has been allocated for this purpose, enabling banks to extend loans amounting to nearly Rs 2,500 crore. The scheme, designed with a leverage ratio of 50:1, aims to facilitate loans worth up to Rs 100 crore with an investment of Rs 2 crore, while maintaining an NPA ceiling of 10 percent to mitigate fiscal risks.
Industry Minister Manjinder Singh Sirsa hailed the initiative as a historic boon for Delhi’s industrial and economic landscape. He emphasized that the scheme, offering collateral-free loans of up to Rs 10 crore, signifies a substantial structural reform benefiting nearly one million MSMEs in Delhi, including over 200,000 manufacturing units. The government’s objective, as clarified by the Industry Minister, is not solely focused on credit disbursal but on empowering MSMEs for substantial investments and long-term growth.
