SIDBI’s 59-minute loan approval scheme for MSMEs: The government and SIDBI’s 59-minute loan approval scheme for MSMEs – PSB Loans in 59 Minutes – has sanctioned 2.46 lakh loans involving Rs 84,963 crore as of July 3, of which 2.28 lakh loans amounting to Rs 68,593 crore were disbursed, according to the MSME Ministry data from its dashboard. In comparison, 2.40 lakh loans involving Rs 81,690 crores were sanctioned as of June 1 last year, of which 2.23 lakh loans involving Rs 66,256 crores were disbursed.
The scheme was launched back in November 2018 for in-principle bank approval to collateral-free term loans or working capital loans for MSMEs from Rs 1 lakh to Rs 5 crore. The amount disbursed under the scheme was 3.39 per cent of the total bank credit of Rs 20.20 lakh crore deployed to MSMEs under priority sector credit in May this year.
Initially introduced to provide credit of up to Rs 1 crore, the scheme saw a significant enhancement in July 2019, with the credit limit being raised to Rs 5 crore. This programme facilitates various types of loans, such as term loans and working capital loans, as well as Mudra loans, catering to the needs of MSMEs. These loans can be utilized for purposes such as acquiring new plant and machinery, upgrading technology, expanding products, purchasing raw materials, and developing infrastructure, among others.
According to the scheme’s FAQs, borrowers are not charged for registration on the portal. However, if a borrower’s loan application aligns with the products offered by lenders and they wish to receive an in-principle approval, a payment of Rs 1,000 is required. The time taken for loan disbursement after approval depends on the accuracy of the information and documentation provided by the borrower on the portal and the procedures followed by the banks. The portal states, “The more accurate the data, the sooner you will get disbursal. Generally, after receiving in-principle approval, the loan is expected to be sanctioned/disbursed within seven to eight working days.”