PM Modi 59-minute MSME loan approval: requests for 2.23 lakh sanctioned by PSBs; 93% disbursed to date


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Gross bank credit deployed to MSEs in December 2020 had increased 6.6% to Rs 11.31 lakh crore, compared to Rs 10.61 lakh crore during the period last year.

Credit and financing for MSMEs: Public Sector Banks (PSBs) authorized 2,233,501 loans, under the 59-minute loan approval program launched by Prime Minister Narendra Modi in November 2018, to MSMEs as of February 1, 2021, according to the latest data published by the Ministry of MSMEs. . Out of over 2.23 lakh sanctioned loans involving Rs 72,502 crore, 93.6% – 2,09,326 loans involving Rs 59,548 crore were disbursed as of February 1, 2021. This represents an increase from the 2,03,120 loans of a amount of Rs 56,773 crore disbursed as of November 30, 2020 and 1,964,473 loans for an amount of Rs 54,545 crore disbursed as of August 31, 2020.

The program was initiated to allow the bank to approve in principle a term loan or working capital loan for MSMEs of Rs 1 lakh to Rs 1 crore at an interest rate of 8, 5% and more. However, State Bank of India, Andhra Bank, Corporation Bank, Oriental Bank of Commerce and Union Bank of India increased the credit limit to Rs 5 crore in July 2019. The platform is integrated to the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to verify the borrower’s eligibility. MSMEs are required to share the GST identification number, computer declarations, half-yearly bank statements and owner’s contact details. However, eligibility for raising credit through the portal depended on income, the company’s repayment capacity and existing credit facilities, as MSMEs, who had taken out loans earlier under other government programs, can still apply for loans through the loan approval program in 59 minutes. . The latest data has been updated on the MSME Dashboard portal by the ministry.

Also Read: Nine Months After Launch, Modi govt’s MSME Grievance Portal, Champions Resolves As Many Cases

“The program is not limited to new loans. Overall, only 7 percent of the MSME sector has been reached by banks through different programs, while many do not even reach banks. They get microloans from friends and family and other non-bank channels. For example, to set up a sewing workshop, the entrepreneur cannot go to a bank, ”Anil Bhardwaj, secretary general of the Federation of Indian Micro and Small and Medium Enterprises, told Financial Express Online.

While the program offered approval in principle to a loan application in 59 minutes, the time required for loan disbursement depended on the information and documentation provided by borrowers on the portal and banks. According to the program portal, the more accurate the data, the sooner borrowers will get the disbursement while in general, after approval of the principal, the loan should be sanctioned / disbursed within 7-8 working days. “I guess since the requests are followed, the banks are cautious about the disbursement time,” Bhardwaj said.

The amount paid to MSMEs through the 59-minute program in November 2020 was only 5% of the overall gross bank credit deployed to micro and small businesses in November 2020. From Rs 10.57 lakh crore deployed in November 2019, the credit banking MSE rose 6.1% to Rs 11.22 lakh crore in November 2020, according to the Reserve Bank of India’s January 2021 bulletin.

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