Delhi government has launched a new collateral-free loan scheme for MSME’s. This scheme aims to boost entrepreneurship, create jobs, and promote local economic growth. CGTMSE scheme offers credit guarantees from 75% to 85% to MSEs across India.
Under the CGTMSE scheme, both new and existing micro and small enterprises, including manufacturing and service enterprises up to Rs. 5 crores. Delhi government has allocated ₹5 crore for the financial year 2025 – 26 to support this scheme.
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What is CGTMSE Scheme?
The CGTMSE scheme was introduced to promote entrepreneurship by enabling small businesses to access loans without the need for collateral. It contributes towards the creation of jobs, economic growth, and the development of rural and semi-urban communities.
Key Features of Delhi’s New Collateral-Free Loan Scheme for MSME’s
Loan Coverage: Loans up to ₹10 crore will be covered up to 95% by a combination of CGTMSE and Delhi government.
Micro Enterprises: For loans up to ₹5 lakh, 85% coverage is provided by CGTMSE and 10% by Delhi government.
Women Entrepreneurs & Agniveer-Promoted MSMEs: For loans up to ₹10 crore, 90% coverage comes from CGTMSE and 5% from Delhi government.
Other Small Enterprises: Coverage is split as 75% from CGTMSE and 20% from Delhi government.
Benefits of CGTMSE Scheme
- Ceiling for Guarantee coverage raised from Rs. 200 lakh to Rs. 500 lakh
- Guarantee fee reduced to diminish the overall cost of borrowings to MSEs
- Micro Finance Institutions as Member Lending Institutions (MLIs) are now eligible
- Concessions related to fees and increased coverage to SC/STs
- Reduced Guarantee fee by 10% and coverage extent increased to 85% to Women, ZED Certified Units and Units in Aspirational Districts
- Annual Guarantee Fee structure revised and fee reduced to as low as 0.37%
Document Requirement for CGTMSE
- CGTMSE loan application form with passport-sized photos
- Business incorporation or company registration certificate
- Business project report
- CGTMSE loan coverage letter
- Bank-approved copy of the CGTMSE loan
- Any other documents required by the bank
- KYC (know your customer) documents of the business owners (PAN, Aadhaar Card, Voter ID, Passport)
- Proof of business ownership
- Financial statements and projections
- Business registration and licenses
- Relevant business licenses
- Permits required to operate the business
- Udyam Registration certificate
- Income tax returns
- Bank statements
Educational institutions, agriculture, training institutions, and Self-Help Groups (SHGs) are not eligible for guarantee cover under CGTMSE. The current CGTMSE fee is payable at the rate of 1.5%. It is payable at 0.75%.