Credit and finance for MSMEs: SIDBI’s 59-minute loan approval scheme for micro, small and medium enterprises (MSMEs), PSB Loans in 59 Minutes has disbursed 2,24,323 loans involving Rs 66,635 crores out of 2,41,781 loans amounting to Rs 82,323 crores sanctioned as of September 1, 2022, shows latest government data on MSME dashboard. In comparison, loans sanctioned as of August 31, 2021, under the 59-minute loan scheme to MSMEs stood at 2,33,845 involving Rs 77,811 crore while loans disbursed were 2,17,828 amounting to Rs 63,553 crore. This indicated only a marginal year-on-year increase of 2.9 per cent in loans disbursed.
Launched in November 2018, the scheme provides in-principle bank approval for collateral-free term loans or working capital loans to MSMEs from Rs 1 lakh to Rs 5 crore in 59 minutes. While the borrower is not required to pay for registration, a Rs 1,000 payment is required by those whose loan applications match with products of lenders and wants to receive an in-principle approval, according to the scheme’s FAQs. The time taken for disbursement of the loan depends on the information and documentation provided by the borrower.
Meanwhile, fintech platform Online PSB Loans (OPL), which operates the scheme is likely to hit the Rs 1-lakh-crore mark in disbursement by the end of FY23, its Managing Director and CEO Jinand Shah had told FE Aspire (erstwhile Financial Express Online) in July this year. 50 per cent growth, said Shah, will be on the back of the credit season that begins in September and goes up to March for MSMEs. The portal has partnered with over 21 lenders such as SBI, Punjab National Bank, Bank of Baroda, ICICI Bank, Kotak Mahindra Bank, and IndusInd Bank to facilitate credit to borrowers.
Total bank credit to the MSME sector in July stood at Rs 18.08 lakh crore, up 24 per cent from Rs 14.56 lakh crore in July last year, according to the latest data on sectoral deployment by the Reserve Bank of India.