Exclusive: SIDBI earmarks Rs 200 cr for MSME-focused Shwas, Arog schemes; sanctioned Rs 90 crore loans

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May 20, 2021 4:25 PM

Credit and Finance for MSMEs: SIDBI had launched the two schemes on April 30, 2021, envisaging funding up to an amount of Rs 2 crore to an MSME at an interest rate of 4.50 – 6 per cent per annum within 48 hours after receipt of all the documents and relevant information.

Tax Saving Options for Salaried Know all about how salaried individuals can save tax maximallyThe year-on-year gross bank credit growth to MSEs in March had declined to its lowest level, amid the second Covid wave, since May in the financial year 2020-21.

Credit and Finance for MSMEs: Small Industries Development Bank of India (SIDBI) — the principal financial institution focusing on micro, small, and medium enterprises (MSMEs) — has earmarked Rs 200 crore for its newly launched Shwas and Arog schemes for MSMEs manufacturing Covid-related goods, a senior official at SIDBI told Financial Express Online. While Shwas caters to MSMEs manufacturing oxygen cylinders, oxy-generators, oxygen concentrators, liquid oxygen or providing services in transportation, storage, refilling to supply of these items, Arog focuses on enabling credit for MSMEs in manufacturing of products or providing services which are directly related to fighting Covid including pulse oximeters, permitted drugs such as (Remdesivir, Fabiflu, Dexamethasone, Azithromycin, etc), ventilators, PPE kits, etc.

“We have sanctioned applications involving Rs 90 crore loan amount so far and another set of applications worth Rs 83 crore loan is pending. As demand evolves we will expand the corpus as well. Presently we have earmarked Rs 200 crore for the two schemes. The scheme would continue till Covid exists and if there is a third wave ahead, the scheme would be revised based on the contours of the pandemic,” the official aware of the schemes’ details at SIDBI added requesting anonymity.

SIDBI had launched the two schemes on April 30, 2021, envisaging funding up to an amount of Rs 2 crore to an MSME at an interest rate of 4.50 – 6 per cent per annum within 48 hours after receipt of all the documents and relevant information. However, MSMEs aren’t quite excited about such schemes from banks and the government. “All these schemes are great and noble in thought but their execution remains painful. At the end of the day, it is just a reduction in the rate of interest. We are working amid the pandemic and don’t have time to deal with the documentation involved. It is too little too late,” Darshan Bhatia, Founding Partner at ICU ventilator maker DVB InvenTek told Financial Express Online.

Also read: CBIC brings job work under IGCR Rules; may help MSMEs operating without complete manufacturing facility

Bengaluru-based diagnostic test device manufacturer Bhat Biotech India also echoed similar sentiments. “We had applied for SIDBI’s Safe scheme but we couldn’t get the credit despite completing all formalities. Such schemes by banks are good but it is difficult to get through them. While you spend so much time, the government says one thing and banks say a different thing. However, ultimately banks are responsible for giving funds. They are not supportive when you reach out to them for credit. Despite the challenge, we have been able to grow tremendously from Rs 25 crore turnover to Rs 100 crore last financial year. Initially, we were the only two-three companies in India manufacturing viral transport medium (VTM) last year and we were able to supply them on time across India,” Dr Shama Bhat, Founder and CMD, Bhat Bitotech India told Financial Express Online. VTM are tubes used for collection, transportation, and preservation of nasopharyngeal or oropharyngeal virus samples.

Importantly, SIDBI had last year launched a similar scheme called SAFE for all MSMEs engaged in the manufacturing of hand sanitizers, masks, bodysuits, ventilators, testing labs, and other products. “The Safe scheme closed on March 31, 2021. Since this year, the oxygen was in short supply so Shwas was launched. This year the requirement is different including medicines as last year Hydroxychloroquine was in use but this year, there are Ivermectin, Remdesivir, etc. The new schemes are tuned to second wave’s requirement,” the official added.

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