Credit and finance for MSMEs: The government and SIDBI’s 59-minute loan approval scheme for MSMEs — PSB Loans in 59 Minutes disbursed 2,25,700 loans involving Rs 67,246 crore as of December 1, 2022, out of 2,43,630 loans involving Rs 83,168 crore sanctioned, according to the latest data by the MSME ministry on its dashboard. The disbursed loan volume grew only by 2.59 per cent year-on-year (YoY) from 2.20 lakh loans disbursed during the year-ago period while sanctioned loans increased by 3.2 per cent YoY as of December 1, 2022, from the corresponding period in the preceding year.
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Month-on-month, sanction loans as of December 1, 2022, were up by 0.20 per cent from 2,43,140 loans sanctioned as of November 1, 2022, while disbursement volume also grew by 0.20 per cent from 2,25,236 loans disbursed.
The scheme was launched in November 2018 to provide 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. Borrowers are required to pay Rs 1,000 to receive approval from the bank if the loan application matches the products of lenders, according to the scheme’s FAQs. The time taken for disbursement of the loan depends on the information and documentation provided by the borrower.
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Launched originally to offer credit up to Rs 1 crore, the credit limit under the scheme was increased to Rs 5 crore in July 2019 while the interest rate levied ranges from 8 to 18 per cent. The scheme enables term loans and working capital loans, and Mudra loans for MSMEs to purchase plant and machinery, technology upgrade, product expansion, purchase of raw materials, infrastructure development, etc.
Meanwhile, the MSME sector had secured Rs 18.26 lakh crore loans in priority sector lending in November 2022 as per the RBI data — 14.1 per cent of Rs 129.47 lakh crore overall gross bank credit deployed across sectors including food and non-food credit deployed during the month. In comparison, Rs 15.24 lakh crore credit was deployed in November 2021 – 13.6 per cent of Rs 111.62 lakh crore overall bank credit deployed then by banks.
