September 25, 2022

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SIDBI’s 59-min loan scheme: Total sanctions to MSMEs near 2.5 lakh involving over Rs 80k crore so far

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Credit and Finance for MSMEs: Bank loans sanctioned to micro, small and medium enterprises (MSMEs) under SIDBI’s 59-minute loan approval scheme as of June 1, 2022, stood at 2,40,852 involving Rs 81,690 crores, according to MSME Ministry’s monthly data on PSB-Loans-in-59-minutes programme. Out of total loans sanctioned, 2,23,507 loans involving Rs 66,256 crores were disbursed so far. Moreover, during the first two months (April-May) of the financial year 2022-23, around 1,101 loans were sanctioned while 818 were disbursed, data indicated as sanctioned loans as of April 1, 2022, were 2,39,751 while loans disbursed were 2,22,689.

Launched in November 2018, the scheme enables in-principle bank approval for collateral-free term loans or working capital loans to MSMEs from Rs 1 lakh to Rs 5 crore. However, the amount disbursed via the scheme had only a single-digit share of 4.63 per cent in the total bank credit of Rs 17.63 lakh crore to MSMEs in April 2022. The latest data on sectoral deployment of bank credit was released by the Reserve Bank of India on May 31, 2022.

While the borrower doesn’t need to pay for registration on the portal, a Rs 1,000 payment is required by borrowers whose loan application matches with products of lenders and wants to receive an in-principle approval, according to the scheme’s FAQs. Moreover, the time taken for loan disbursement after the approval is based on the information and documentation provided by the borrower on the portal and banks. “The more accurate the data, the sooner you will get disbursal. Generally, post in-principle approval, the loan is expected to be sanction/disbursed in seven-eight working days,” according to the portal. 

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In terms of collateral, while borrowers without collateral security can avail business loans through the portal under the CGTMSE scheme, it is as per lenders’ discretion to seek collateral from borrowers to disburse loans. In FY22, only 9,868 loans involving Rs 5,197 crore were sanctioned, of which 8,155 loans amounting to Rs 3,729 crore were disbursed. The portal had partnered with over 21 public and private lenders including SBI, Punjab National Bank, Bank of Baroda, ICICI Bank, Kotak Mahindra Bank, and IndusInd Bank to disburse loans.