The 59-minute loan approval scheme for micro, small and medium enterprises (MSMEs) by the government and SIDBI has sanctioned 2.48 lakh loans till January 1, 2024, of which 2.29 lakh loans were disbursed. According to the data available on the MSME Ministry’s dashboard, Rs 85,980 crore loans were sanctioned, as of January 1, while Rs 69,240 crore loans were disbursed since the scheme’s launch in November 2018.
In comparison, as of March 1, 2023, 2.45 lakh loans involving Rs 83,938 crore were sanctioned under the scheme, of which 2.26 lakh loans amounting to Rs 67,847 crore were disbursed.
The scheme offers in-principle bank approval for collateral-free term loans or working capital loans for MSMEs from Rs 10 lakh to Rs 5 crore under the government’s CGTMSE programme. The minimum repayment tenure is one year while the maximum is 15 years with interest rates ranging from 6.8 per cent to 21 per cent depending on the MSME’s credit and risk profile.
Businesses can also apply for Mudra loans to buy new plant and machinery, upgrading technology, expanding products, purchasing raw materials, and developing infrastructure, among others.
Meanwhile, banks had invested Rs 23.36 lakh crore under priority sector lending in MSMEs in November 2023, up 21.9 per cent from Rs 19.16 lakh crore deployed in November 2022, showed latest data on sectoral deployment of bank credit by the Reserve Bank of India (RBI). In October 2023, Rs 23.15 lakh crore was deployed in MSMEs under priority sector lending.
In terms of the quality of the MSME loans, banks reported further improvement in the first half of the current financial year, said the latest Financial Stability Report by the Reserve Bank of India (RBI) released in December 2023. The MSME gross non-performing assets (GNPA) had declined to 4.7 per cent in September 2023 from 6.8 per cent in March 2023 and 7.7 per cent in September 2022. In March 2022, the GNPA ratio was 9.3 per cent.