Credit and Finance for MSMEs: The quantity of loans sanctioned by public and private sector banks and non-banking economic organizations (NBFCs) to MSMEs beneath the 59-minute loan approval scheme as of April 30, 2021, stood at 2,31,425 involving Rs 76,670 crore. Of this, 2,15,836 loans amounting to Rs 62,722 crore had been disbursed, according to the offered information from the Ministry of MSME. This is up from 2,03,120 loans worth Rs 56,773 crores disbursed as of November 30, 2020, and 1,96,473 loans involving Rs 54,545 crores 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 more are the companion banks for SIDBI’s 59-minute loan approval scheme.
Launched in November 2018 by Prime Minister Narendra Modi, the scheme gives enterprise loans which includes term loans and working capital loans, and Mudra loans to MSMEs for acquire of plant and machinery, technologies upgrade, solution expansion, acquire of raw supplies, infrastructure development, and so on. While in-principle approval is provided for term loans and working capital loans ranging involving Rs 1 lakh and Rs 5 crore, the credit limit beneath Mudra loans is up to Rs 10 lakh. Mudra loans are extended beneath Shishu loans up to Rs 50,000, Kishore loans involving above Rs 50,000 and up to Rs 5 lakh, and Tarun loans above Rs 5 lakh and up to Rs 10 lakh.
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Importantly, Rs 62,722 crore loans disbursed to MSMEs beneath the 59-minute loan scheme as of April 30, 2021, had been 4.7 per cent of the gross bank credit deployed to MSMEs in March 2021. According to the RBI’s April bulletin, Rs 13,13,358 crore (Rs 11,07,236 crore to micro and compact enterprises and Rs 2,06,122 crore to medium enterprises) was the gross bank credit to MSMEs as of March 26, 2021. “Getting this much disbursed from banks is also quite significant for MSMEs. Most of these loans are under Rs 1 crore and the majority are concentrated around Rs 20 lakh or less. It is mostly first-time borrowers that are taking credit under this scheme. But if you would expect this 4.7 per cent share in total credit exposure to MSMEs to be, let’s say, over 20 per cent, then that won’t happen immediately,” Govind Lele, General Secretary, Laghu Udyog Bharati told TheSpuzz Online.
Meanwhile, in order to help Covid-hit MSMEs additional, the government had on Sunday had extended the Emergency Credit Line Guarantee (ECLGS) scheme by 3 months to September 30, 2021, from June 30, 2021, or till guarantees for an quantity of Rs 3 lakh crore are issued beneath the fourth revision of the scheme dubbed ECLGS 4.. The Ministry of Finance also announced a one hundred per cent assure cover to loans up to Rs 2 crore to hospitals, nursing residences, clinics, health-related colleges for setting up on-web-site oxygen generation plants and integrated the civil aviation sector beneath ECLGS 3. scheme.