PSBloansin59minutes.com -- an online marketplace will enable in-principle approval for a term loan or working capital loan required by MSMEs for their businesses within 59 minutes.
Five of India’s leading public sector lenders including State Bank of India, Andhra Bank, Corporation Bank, Oriental Bank of Commerce, and Union Bank of India have come together to facilitate the raising of loan by MSMEs in an easier way through PSBloansin59minutes.com — an online marketplace. The facility will enable in-principle approval for a term loan or working capital loan required by MSMEs for their businesses, SBI said in a statement. MSMEs would be able to secure a loan in the range of Rs 1 lac to Rs 5 crore within 59 minutes from public and private banks along with non-banking financial companies.
The marketplace would bring down the turnaround time taken for in-principle loan processing from “day to 59 minutes,” as per the website. Following the approval of the loan and MSME receiving the letter, the amount is “expected to be sanctioned or disbursed” in around seven-eight working days. The platform uses algorithms “to analyse data points from different sources including a bank statement, IT returns, GST data etc,” while integrating with the existing infrastructure of the banks “by having banker interface covering branch level integrations.”
The marketplace “quickens sanction time and increases transparency,” said Devi Shankar Mishra, CGM- MSME at SBI adding that the loan up to Rs 5 crore “will broaden the playing field for the MSME sector.” The interest rate for the loan would begin from 8.5 per cent onwards. The marketplace is also integrated with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, hence, MSMEs may get a collateral-free loan. Post uploading of information by MSMEs for the loan, the marketplace’s proprietary algorithms appraise the application and determine the amount to be given and then connect the MSME to the bank’s branch within 59 minutes.
Funding, which remains the key issue for small businesses, hasn’t been easy to come by even as the government has taken cognizance of the need for easy lending to MSME sector without collateral. MSME Minister Nitin Gadkari had on Monday in Rajya Sabha said that 4.36 lakh credit facility (collateral free number of loans) were given Rs 30,168.57 crore in FY19 to MSMEs up from 2.63 lakh such loans were given worth Rs 19,065.91 in FY18.