SIDBI’s 59-Minute Loan Program Sees As Much Growth in Sanctioned Loans to MSMEs in Over 12 Months
Credit and financing for MSMEs: SIDBI’s 59-Minute In-Principle Loan Approval Program for Micro, Small, and Medium Enterprises (MSMEs), launched by Prime Minister Narendra Modi in November 2018, has achieved 10% growth in sanctioned loans to September 30, 2021, from August 31, 2020, analysis of official data indicated. From 2,12,091 loan applications involving Rs 66,991 crore sanctioned until the end of August last year, the volume rose to 2,34,905 loans involving Rs 78,409 crore as of September 30, 2021. Likewise, the growth in Loans disbursed was 11% compared to 1,96,473 loan requests involving Rs 54,545 crore to 2,18,977 requests involving Rs 64,067 crore during said period.
“The penalty varies from month to month and is also more dependent on seasonality. From October to March, the growth of sanctioned loans is highest with the holiday season extending until January. MSMEs need more funding during this period compared to other months. On the other hand, from March onwards, growth is weaker and loans are normally low as the period is more devoted to audits in the banking sector. Once the loan is sanctioned, it is very unlikely that it will not go to the borrower, ”Jinand Shah, Managing Director of Online PSB Loans, told Financial Express Online.
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The portal will seek to partner with white label platforms by Diwali or December this year and non-bank financial companies (NBFCs) by January next year to improve access to credit. for more MSMEs applying through the portal, Shah said in an interaction in September. The lending portal would also provide cash flow based loans for MSMEs as a separate initiative in the current fiscal year.
“Cash flow based loans are what we expect for this fiscal year. We are focused on building the infrastructure required for this and it should be completed in about three to four months. We are working in close collaboration with a few banks, including the largest, which are already on the 59 minutes portal. You need few segments of the ecosystem to be digitally connected and it should work end to end so MSMEs don’t have to go to bank branches. Shah had said.
It is important to note that Rs 64,067 crore disbursed by banks as part of the 59-minute loan approval program in September 2021 accounted for 4.8% of the total bank loans deployed to MSMEs. As of August 2021, Rs 13.25 lakh crore was deployed by banks to MSMEs, according to the Reserve Bank of India’s August data on sector bank lending. While Rs 11.10 lakh crore was rolled out for micro and small businesses, the credit given to medium businesses stood at Rs 2.15 lakh crore.