I had a deep interest in starting my own business from an early age, but like many first-generation entrepreneurs in India, I had no family business background, no inherited capital, and no assets to mortgage. At that stage of my life, a collateral free loan for MSME felt like the only realistic path forward.
I was determined.
I strongly believed one thing very clearly:
Money cannot buy hard work, knowledge, or experience—but these things can eventually help me earn money.
This belief became the foundation of my entrepreneurial journey.
You may also like to read: Why Collateral-Free business Loan Are Game Changers for New & Marginalized Entrepreneurs.
In 2013, the MSME loan ecosystem in India was very different from today.
Despite all this, I was determined to find a way.
I knew that if I genuinely understood my business and market, opportunities would open.
You may also like to read:The Dark Side of Collateral-Free Business Loans: My Hard-Learned Lesson Every Entrepreneur Should Know.
My interest slowly developed in the tea blending and packaging business.
Why?
Because a tea auction house was located near my neighbourhood.
Every day, I used to sit in their office—observing:
Without realizing it, I was gaining practical business exposure, something books cannot teach.
That’s when I decided:
👉 I will start my own tea blending and packaging MSME.
I had no property, no gold, no LIC policies—nothing to offer as collateral.
Still, I approached my bank and applied for a collateral free loan for MSME.
I politely replied:
If I had collateral or money, why would I apply for a collateral free business loan?
That was a turning point.
Instead of giving up, I answered every question with confidence:
I wasn’t bluffing.
I had spent months learning, observing, and understanding the business.
After several discussions and evaluations, the bank finally agreed.
✅ Loan approved for:
It was not an easy yes, but it was an honest one.
And that loan helped me start my tea packaging MSME unit.
Banks don’t invest only in assets—they invest in people.
Your market understanding can become your collateral.
If I had accepted the first rejection, my business would never exist.
Schemes like CGTMSE, PMEGP, MUDRA didn’t work effectively in 2013 the way they do today.
Yes—compared to 2013, collateral free loans for MSMEs are more structured today, supported by:
But one thing remains unchanged:
👉 Banks still back entrepreneurs who show seriousness and understanding.
A collateral free loan for MSME is a business loan where the entrepreneur is not required to pledge property, gold, or assets as security.
Yes. With a clear business plan, market understanding, and proper documentation, first-time entrepreneurs can secure loans.
No. In 2013, banks were very cautious and approvals were rare, especially without guarantees or schemes.
Strong business knowledge, confidence, practical exposure, and persistence.
Yes. With schemes like CGTMSE, PMEGP, and MUDRA, access has improved significantly.
Tabrez is a first-generation entrepreneur and the founder of BusinessZindagi.com, where he writes practical, experience-based content on MSME businesses, loans, government schemes, and entrepreneurship in India. His insights are based on real journeys—not theory.
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Disclaimer:
The information shared in this article is based on my personal experience and publicly available government sources. Loan eligibility, approval, interest rates, and terms may vary depending on bank policies, credit profile, location, and applicable government guidelines at the time of application. This article does not guarantee loan approval and should not be treated as financial or legal advice. Readers are advised to consult their bank, financial advisor, or official government portals before taking any financial decisions.
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