Govt’s MSME credit scheme continues to roll with 800% jump in amount disbursed to small businesses

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Published: June 23, 2020 6:21 PM

Credit and Finance for MSMEs: The amount sanctioned under the Rs 3 lakh crore collateral-free scheme crossed Rs 79,000-crore mark, as of June 20, 2020, while the amount disbursed stood at Rs 35,000 crore.

The top lenders under the scheme have been State Bank of India, HDFC Bank, Bank of Baroda, Punjab National Bank, and Canara Bank.

Credit and Finance for MSMEs: The government’s collateral-free loan scheme worth Rs 3 lakh crore continued to support MSMEs with emergency credit to cope up with the Covid impact. The amount sanctioned under the scheme crossed Rs 79,000 crore mark as of June 20, 2020, while the amount disbursed stood at Rs 35,000 crore, according to the data shared by the Finance Minister on Tuesday. This is 799.2 per cent up from Rs 3,892 crore disbursed as of June 1, 2020. The government has been timely sharing the details around the amount sanctioned and disbursed along with the number of MSME accounts benefitted under the scheme. The scheme was part of the massive Rs 20 lakh crore stimulus package announced by PM Modi last month to revive the Covid-hit economy.

The top lenders under the scheme have been State Bank of India, HDFC Bank, Bank of Baroda, Punjab National Bank, and Canara Bank. MSMEs with an outstanding credit of up to Rs 25 crore as on February 29, which is less than or equal to 60 days past due as on that date along with up to Rs 100 crore in annual turnover are eligible to seek credit under the scheme.

Also read: No turning back: Covid-led e-retail, payments growth here to stay even as in-store buying may stay muted

On the other hand, SIDBI has sanctioned more than Rs 10,220 crore to NBFCs, Micro Finance Institutions and banks for lending to MSMEs under the RBI’s Special Liquidity Facility announced in March-April 2020, Finance Ministry said in a statement. Moreover, the National Housing Bank (NHB) has sanctioned Rs 10,000 crore to Housing Finance Companies. “This refinance by SIDBI & NHB is in addition to ongoing schemes through which over Rs 30,000 crore has been sanctioned,” the ministry added. NBFCs & MFIs are also supported under the Extended Partial Guarantee Scheme where approvals have crossed Rs 5,500 crore while transactions for another Rs 5,000 crore are currently going through the approval procedure. There are also “certain other deals currently under negotiation.”

Meanwhile, gross bank credit growth to micro and small enterprises (MSEs) by banks in the first month of FY 2020-21 stood at 3.3 per cent. The credit grew to Rs 11 lakh crore from Rs 10.65 lakh crore in April FY20, according to the RBI bulletin even as there was a contraction of  4.4 per cent from Rs 11.49 lakh crore in March (FY20).

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