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SIDBI’s 59-min loan scheme: MSME loans jump 3.2% only YoY as of Nov; disbursals up 2.6%, shows govt data

Credit and finance for MSMEs: SIDBI’s 59-minute loan approval scheme for micro, small and medium enterprises (MSMEs), PSB Loans in 59 Minutes has recorded only a 3.2 per cent jump in loan applications sanctioned as of November 1, 2022, from the year-ago period. Banks sanctioned 2,43,140 loans amounting to Rs 82,962 crore as of November 1, 2022, vis-a-vis 2,35,511 loans involving Rs 78,738 crore sanctioned as of November 1, 2021, official data from the MSME Ministry’s dashboard showed. 

In terms of loans disbursed, the year-on-year growth stood at only 2.6 per cent from 2,19,526 loans amounting to Rs 64,326 crore disbursed as of November 1, 2021, to 2,25,236 loans involving Rs 67,007 crore as of November 1, 2022. In month-on-month sanctions and disbursals, MSMEs were sanctioned 2,42,812 loans involving Rs 82,822 crores as of September 30, 2022, while 2,25,015 loans involving Rs 66,922 crores were disbursed. 
The scheme, which enables 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, was launched in November 2018. While the registration is free for borrowers, they are required to pay Rs 1,000 to receive the approval once the loan application matches with 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. 

Currently, over 21 partner banks including SBI, Bank of Baroda, ICICI Bank, Kotak Mahindra Bank, Punjab National Bank, etc., are available to avail of the scheme. While the borrower can avail the loan even in the absence of collateral under the CGTMSE scheme, it is as per lenders’ discretion and collateral can be asked for as per the guidelines. Borrowers are required to share GST and income tax details, bank statements, and company ownership details to apply for a loan.