PM Modi 59-minute MSME loan approval: banks disburse 2.15 lakh requests; the amount exceeds Rs 60k crore


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Former MSME Minister Nitin Gadkari informed Parliament in March this year that only 343 guarantees amounting to Rs 40.56 crore had been issued as of March 10, 2021, since the launch of the program. (Image: PTI)

Credit and financing for MSMEs: The number of loans sanctioned by public and private sector banks and non-bank financial corporations (NBFCs) to MSMEs under the 59-minute loan approval program as of April 30, 2021, stood at 231,425, or 76,670 crore rupees. Of this total, 2,836 loans amounting to Rs 62,722 crore were disbursed, according to data available from the MSME Ministry. This represents an increase from the 2,03,120 loans worth Rs 56,773 crore disbursed as of November 30, 2020 and the 1,964,473 loans involving Rs 54,545 crore disbursed as of August 31, 2020. SBI, Punjab National Bank, Bank of Baroda, ICICI Bank, Kotak Mahindra Bank, Indian Bank, Central Bank of India, Yes Bank and many more are partner banks in SIDBI’s 59-Minute Loan Approval Program.

Launched in November 2018 by Prime Minister Narendra Modi, the program offers business loans, including term loans and working capital loans, and Mudra loans to MSMEs for the purchase of plant and machinery, technological upgrading, product expansion, purchase of raw materials, infrastructure development, etc. While approval in principle is offered for term loans and working capital loans ranging from Rs 1 lakh to Rs 5 crore, the credit limit under Mudra loans can be up to Rs 10 lakh. Mudra loans are given under Shishu loans up to Rs 50,000, Kishore loans between over Rs 50,000 and up to Rs 5 lakh, and Tarun loans above Rs 5 lakh and up to 10 lakh Rs.

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It is important to note that the loans of Rs 62,722 crore paid to MSMEs under the 59-minute loan program as of April 30, 2021 represented 4.7% of the gross bank credit deployed to MSMEs in March 2021. According to the newsletter d April from the RBI, Rs 13 13,358 crore (Rs 11,07,236 for micro and small businesses and Rs 2,06,122 for medium businesses) was the gross bank credit given to MSMEs as of March 26, 2021. “Getting that many disbursements from banks is also quite important for MSMEs. Most of these loans are less than Rs 1 crore and the majority are concentrated around Rs 20 lakh or less. It is especially the first-time borrowers who contract a loan under this mechanism. But if you expect that 4.7% share of total MSME credit exposure to be, say, over 20%, then that won’t happen immediately, ”Govind Lele told Financial Express Online. , general secretary of Laghu Udyog Bharati.

Meanwhile, in order to further support MSMEs affected by Covid, the government extended the Emergency Line of Credit Guarantee Program (ECLGS) from three months to September 30, 2021, from June 30, 2021, or until Sunday. ‘guarantees for an amount of Rs 3 lakh crore are issued as part of the fourth revision of the program called ECLGS 4.0. The Ministry of Finance has also announced 100% guarantee coverage for loans up to 2 crore rupees to hospitals, nursing homes, clinics, medical schools for the establishment of production plants. oxygen on site and included the civil aviation sector as part of the ECLGS 3.0 program.

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