Small and Medium Enterprises (SME) are classified based on investment capital entity. It unders...
Just week before Diwali celebrations the Indian Prime Minister Narendra Modi has announced close to a dozen initiatives to support MSME Sector in India. The most important of them all is in-principle approval of loan upto Rs. 1 Crore under 59 minutes. This fastrack loan approval facility is considered to transform the Indian MSME credit space.
It is a widely acknowledged fact that as a developing economy MSME sector plays a vital role in its growth. But, as it constitutes of a small and medium level enterprises and startups they face issues in raising capital.
With a view to solve this problem the government has introduced this fastrack loan approval facility. This is considered to be a transformative step to revolutionize the MSME credit space. This facility will enable the MSMEs to get in-principle approval for loans amounting up to Rs. 1 Crore within 59 minutes. This credit facility will be provided by Small Industries Development Bank of India and 5 other Public Sector Banks (PSBs)
At the launch event the Honorable Prime Minister Narendra Modi informed that after approval granted at the annual review meeting of these PSBs this initiative was implemented on pilot basis. After such implementation around 72,000 loans valuing more than Rs 23,852 Crore have been sanctioned.
MSME sector play an important role to support the Indian economy in following manner:
Despite all these facts MSME sector has been highly affected by government initiatives like introduction of Goods and Serve Tax and demonetization.
Many of the financial requirements of the MSME sector is fulfilled by Non-Banking Finance Companies (NBFCs). However, in current time the NBFC sector is facing some liquidity constraints. This is expected that this liquidity crunch will effect the MSME sector the most.
This new initiative taken by the government is considered to bring a new era for MSME sector. It will solve the problem of finances for the enterprises and will help them do what they do best. These initiatives are considered to boost up the MSME sector and are considered historic.
This initiative will solve following issues:
If you are planning to apply for a loan under this facility you are required to follow these simple steps:
Click on Register option on the official portal (www.psbloansin59minutes.com) created for this funding facility.
Provide all the required basic details including GST, ITR, bank details and director/partner/ proprietor details.
All the information provided by the applicant are verified.
Select the branch of concerned bank you want to choose for the loan facility.
After analysis of all the provided information, instant in-principle approval is granted by the department.
Following details/documents are required for making a loan application under this fastrack loan approval facility:
Recently world bank had issued a list of ‘Ease of Doing Business’ ranking. As compared to the previous list India has leaped more than 23 places and is currently ranking 77th. The Central Government has been working consistently with an objective to promote ease of doing business.
Recently, with the same objective they have introduced a 12-point ‘Support and Outreach Initiative’ for MSME sector. Some of the initiatives introduced are listed below: