New Delhi, Feb. 6 -- The Reserve Bank of India (RBI) said on Friday that small businesses can now avail of loans up to Rs.20 lakh without any collateral, which is double what they were allowed until now.

"With a view to facilitate improved access to formal credit, support entrepreneurial activity and strengthen last mile credit delivery for Micro and Small Enterprises (MSEs) with limited collateral, it has been decided to enhance the limit of collateral free loans to MSEs from Rs.10 lakh to Rs.20 lakh," RBI said in a statement on Friday.

The new norms will apply to loans sanctioned or renewed from April onwards. Lenders use a guarantee from the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for these loans.

The ca...