SIDBI’s 59-Minute Lending Scheme: Banks have so far cleared online loans to MSMEs worth Rs 80,000 million

Credit and financing for MSMEs: The psbloansin59minutes portal, which provides bank approval in principle to term loan or working capital loan for MSMEs of Rs 1 lakh to Rs 5 crore, recorded 2.38 lakh loans involving Rs 80,379 crore sanctioned at March 2, 2022, since the launch of the portal in November 2018, according to official data available from the Ministry of MSMEs. Out of the sanctioned total, 2.21 lakh claims involving Rs 65,331 crore were disbursed. This is an increase of 5.9% from loans of 2.09 lakh of Rs 59,548 crore disbursed as of Feb 1, 2021.

Importantly, credit disbursed through the 59-minute lending portal accounted for 4.3% of the total Rs 15,19,495 crore deployed by banks to MSMEs in January this year. The data on credit deployment to MSMEs comes from the Reserve Bank of India’s bank credit sector deployment data released earlier this month.

“Our targets are quite high, but we would like to reach 10-15 lakhs of sanctioned loans by the end of next year. This target is achievable if MSMEs are aware of the program and start applying, they can access the credit as banks have to lend money to MSMEs anyway as this is a priority sector,” Jinand Shah, Managing Director, Online PSB Loans which runs SIDBI’s 59-minute loan program had said Financial Express Online.

While approval of a loan application is expected within 59 minutes of submission on the portal, disbursement time may vary. According to the portal, the more accurate the data, the faster borrowers will receive disbursement while generally, after principal approval, the loan should be sanctioned/disbursed within 7-8 business days.

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“We had taken a loan of Rs 80 lakh through the 59-minute gate in 2020 from Indian Overseas Bank (IOB). In fact, the amount was disbursed within a day of applying for the loan on the portal. However, I think we got it because we have been IOB’s client for the past 40 years and the bank has been aware of our strong business credentials. I don’t know how easy it would be for any other business with a relatively new account with a bank to get credit through this portal,” said Noida-based Vishwa Nath, who runs Nath Bros Exim International for the manufacture of clothing and the supply of textile products. Financial Express online.

The 59-minute portal is also linked to the Government Credit Guarantee Fund for Micro and Small Enterprises (CGTMSE) for disbursements. MSMEs are required to share GST identification number, IT declarations, semi-annual bank statements and owner contact details. However, eligibility to obtain credit through the portal is dependent on income, business repayment capacity and existing credit facilities, as MSMEs, who had previously taken out loans under other government programs, can also apply for loans through the portal.