Credit and Finance for MSMEs: Many entrepreneurs seek loans, but they face difficulty in identifying the right bank or the branch that is enthusiastic about providing them with loans. Similarly, there are banks interested in financing MSMEs but struggle to find the ideal enterprise. The MSME Loans platform will help both entities find the right match, just like matrimonial sites.
The Chamber of Indian Micro, Small and Medium Enterprises has launched a new portal MSME Loans, which serves as the “match-maker” between the loan-seeking MSMEs and the lenders.
According to Mukesh Mohan Gupta, the President of the MSME association, the rationale behind launching msmeloans.co.in is to assist MSMEs in the loan application process while aiding banks in identifying creditworthy borrowers.
Gupta further added, “Many entrepreneurs seek loans, but they face difficulty in identifying the right bank or the branch that is enthusiastic about providing them with loans. Similarly, there are banks interested in financing MSMEs but struggle to find the ideal enterprise. The MSME Loans platform will help both entities find the right match, just like matrimonial sites.”
To leverage the platform, MSMEs are required to upload their loan requirement, along with financial statements and other supporting documents such as ITR and GST return amongst others on the MSME Loans portal. The details will then be shared with all the lenders on the marketplace who will evaluate the financial documents and assess the potential profitability of the MSME account. Interested banks will directly contact the MSME owners with the loan offer, helping them access capital at competitive rates.
The entire loan application process will be conducted online, while the verification of claims from the bank’s end will be done offline.
“By empowering banks to select MSME accounts, we can significantly reduce the turnaround time from loan application to disbursement, while also providing MSMEs with access to cost-effective capital,” stated Gupta.
The portal will offer both collateral and non-collateral loans to new as well as existing businesses. MSMEs will also have the option to apply for loans through various government schemes, such as, Credit Guarantee Scheme for Startups (CGSS), Prime Minister Employment Generation Program (PMEGP), MUDRA and Credit Guarantee Trust for Micro and Small Enterprises.
The MSME Loans portal has partnered with the credit bureau CIBIL to generate credit scores for businesses, enabling banks to identify the most reliable enterprises.
Although still in the pilot stage, the platform has received over 300 loan applications from MSMEs to date. It has established partnerships with banks such as Punjab National Bank, Central Bank of India, Union Bank of India, IDBI Bank, as well as digital lenders like Flexiloans.