Free tool
Collateral-free MSME loan check
Micro enterprise · ₹15 lakh
Banks must not ask you for collateral
For a micro or small enterprise, RBI directions mandate that banks do not accept collateral on loans up to ₹20 lakh (sanctioned or renewed from 1 April 2026). The bank still appraises the business and takes the assets financed as primary security, and it decides whether to lend.
Read more: the ₹20 lakh rule · CGTMSE
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How this works
MSME category follows the definition notified on 21 March 2025: micro up to ₹2.5 crore investment and ₹10 crore turnover; small up to ₹25 crore and ₹100 crore; medium up to ₹125 crore and ₹500 crore (RBI MSME FAQ, July 2025).
Collateral: under RBI directions amended on 9 February 2026, banks must not take collateral on loans up to ₹20 lakh to micro and small enterprises sanctioned or renewed from 1 April 2026, and may go up to ₹25 lakh for units with a good track record. Above that, CGTMSE can cover collateral-free credit up to ₹10 crore, at the lender's discretion.
The check tells you the rule, not whether a loan will be sanctioned. That decision is always the lender's.
Go deeper: Collateral-free MSE loans up to ₹20 lakh.