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. What is this Fastrack Loan Approval Facility? 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. Objective behind this Initiative MSME sector play an important role to support the Indian economy in following manner: \tIt provides employment to more than 111 million individuals. \tMore than 63 million MSMEs are registered in India. \tMSME contribute to around 30% of Gross domestic Production of India. \t40% of the total exports are done by MSME sector. \tMore than 45% of national manufacturing output is done by them. 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: \tDifficulty in accessing credit facilities. \tProblem of high cost of credit. \tTimely payment issues \tEasy processing of loans \tRepayment and compliance related issues. Features of this Loan approval facility \tThe most important and much appreciated step is the fastrack loan approval facility under which in-pinciple approval for loan amount up Rs. 1 Crore will be granted within 59 minutes. \tA separate portal is introduced for this fastrack loan approval facility. \tThis portal psbloansin59minutes.com is set up by Small Industries Development Bank of India. \tMost of the Public Sector Banks (PSBs) are on board for this initiative and are listed on the portal. \tThis digital platform foe MSME financing has advanced level of information security and has service driven architecture. \tThis online banker interface platform has branch level integration which helps keep in tune with the current systems of PSBs \tFor organizations registered under Goods and Service Tax will be provided an additional 2% subvention or rebate on such incremental loans. \tThis system has its own credit policy along with scoring models and assessment methods. \tAnalysis of GST, ITR as well as bank statements are all possible on a single platform along with other features like Fraud checking and bureau checking. \tLoan Products of the involved banks are created based on these assessment models. \tThis platform is integrated with Goods and service Tax as well as MSME portals. This facilitates the cross check of eligibility of borrowers. Procedure of Loan approval facility If you are planning to apply for a loan under this facility you are required to follow these simple steps: Step 1: Click on Register option on the official portal (www.psbloansin59minutes.com) created for this funding facility. Step 2: Provide all the required basic details including GST, ITR, bank details and director/partner/ proprietor details. Step 3: All the information provided by the applicant are verified. Step 4: Select the branch of concerned bank you want to choose for the loan facility. Step 5: After analysis of all the provided information, instant in-principle approval is granted by the department. Pre-requisites for making a loan application Following details/documents are required for making a loan application under this fastrack loan approval facility: \tGSTIN along with GST login credentials. \tIncome Tax Filing Details in any of the following manner: \tXML files of last 3 years ITR OR \tITR Login credentials along of date of incorporation. \tBank details in any of the following manner; \tNet banking credentials of the business OR \tCopy of bank statement of last 6 months \tDetails of existing loans, if any. \tDetails of Directors/Partners/Sole Proprietor depending upon the form of business. What are the other Initiatives introduced by government? 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: \tMicro, Small and Medium level enterprises exporting their goods will provided an interest subvention on their pre and post-shipment credits. The interest percentage has been raised from 3% to 5%. \tEarlier the public sector companies were required to procure minimum 20% of their internal requirements from MSME Sector. The government has increased this minimum requirement from 20% to 25%. \tAll the central level public sector enterprises are required to join the Government’s e-Marketplace (GeM) to facilitate e-procurement form MSME sector suppliers. \tThe government is planning to establish 20 hubs and 100 tool rooms with a view of technology up gradation of MSMEs. This will be done with a total expenditure of around 6000 Crores. \tWith a view to boost production in pharma sector cluster of MSMEs will be created. \tTo eliminate cash flow problems for MSME sector the government has notified that all the entities with annual turnover exceeding 500 crore will be required msme registration on Trade Receivables e-Discounting System (TReDS) platform.