New Delhi, Jan 27 (NationPress) Focused on empowering female entrepreneurs, Delhi's Chief Minister Rekha Gupta spearheaded the signing of a Memorandum of Understanding (MoU) with a Central lending agency on Tuesday, allowing city investors to obtain loans of up to Rs 10 crore without the need for any collateral, as stated by an official.

This initiative is viewed as a pivotal move to bolster small and micro enterprises within the national capital. The MoU was established between the Delhi Government and the Central Government’s Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to facilitate the execution of the Delhi Credit Guarantee Scheme.

The scheme's primary aim is to support small entrepreneurs in securing loans without the burden of collateral, as explained by the Chief Minister.

According to her, this initiative will significantly enhance access to funding for entrepreneurs and substantially lower the risks faced by banks, motivating them to lend to small enterprises with greater confidence.

Gupta pointed out that many young individuals in Delhi dream of starting their own ventures in sectors such as manufacturing and services, yet they often encounter obstacles due to insufficient financial backing.

With the signing of this MoU, these aspiring entrepreneurs will have the opportunity to secure loans of up to Rs 10 crore without collateral, she noted.

The Chief Minister stressed that this agreement will empower micro and small enterprises to easily access credit without the need for security. Special provisions will be made for first-time and women entrepreneurs to encourage broader participation in business.

Detailing the operational aspects of the scheme, the Chief Minister stated that under the Delhi Credit Guarantee Scheme, the responsibility for loan guarantees will be shared by the Delhi Government and CGTMSE.

Of the total loan amount, CGTMSE will provide a guarantee cover ranging from 75% to 90%, while the remaining portion will be guaranteed by the Delhi Government. Consequently, up to 95% of the loans issued by banks will be backed by government guarantees, significantly reducing the banks’ risk to just 5% and facilitating more confident lending to small businesses, she explained.

The Chief Minister further elaborated that the scheme will encompass various sectors, including manufacturing, services, retail, education, and skill development institutions. A dedicated fund of Rs 50 crore has been established for this purpose, allowing banks to extend loans totaling nearly Rs 2,500 crore. This fund may be increased in the future if necessary.

She mentioned that the scheme operates on a leverage ratio of 50:1, meaning that an investment of Rs 2 crore can facilitate loans amounting to Rs 100 crore. An NPA ceiling of 10% has also been set to ensure that the government's fiscal risk remains manageable.

Industry Minister Manjinder Singh Sirsa hailed the initiative as a historic gift for Delhi’s industrial and economic landscape. He asserted that the scheme signifies a major structural reform for nearly one million MSMEs in Delhi, which includes over 200,000 manufacturing units.

Referring to the provision of collateral-free loans of up to Rs 10 crore as a transformative move, the Industry Minister clarified that the government’s goal extends beyond merely disbursing credit; it aims to empower MSMEs for substantial investments and long-term growth.