Since the Union Budget 2018, Modi government has shown its optimism in respect of Micro, Small and Medium Enterprises (MSMEs) and in its latest move Finance Minister Arun Jaitley has unveiled an online platform for MSMEs to secure loan up to Rs. 1 crore in less than an hour.
Here is detailed the process to opt for such a loan:
The new portal launched is psbloansin59minutes.com and the scheme in entirety is mentioned on the website. As per the portal, "PSB Loans in 59 minutes is an online marketplace, which will enable in-principle approval for MSME loans up to Rs 1 Crore in 59 minutes from Public Sector Banks."
The loan can be secured from public sector banks and Small Industries Development Bank of India (SIDBI). Participating bank in the scheme include SBI, Bank of Baroda, Punjab National Bank, Indian Bank, Vijaya Bank, Allahabad Bank, Andhra Bank, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation Bank, IDBI Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab & Sind Bank, Syndicate Bank, UCO Bank, Union Bank and United Bank of India.
Further after the in-principle approval letter is received, MSME loan is likely to be disbursed in 7 to 8 working days.
The new platform reduces turnaround time for loan processing from the otherwise 20-25 days to just 59 minutes. Additionally, as per the website, till the sanction or final disbursement stage, there is no human intervention. Also, no physical documents are to be submitted for in-principle approval and the system makes use of advanced algorithms for analyzing data from sources including GST data, income tax returns and bank statements.
Under the scheme, MSME borrower may secure funds from Rs 10 lakhs to Rs 1 crore and the starting rate of interest is pegged at 8%.
Key attributes of MSME loan up to Rs. 1 crore dispensed in 59 minutes are:
1 The new online platform shown complete compatibility with current banking processes.
2 At a time, MSME can apply for such a loan at various financial institutions. The system is integrated with information security.
3 The participating banks in accordance with their credit policy can carve out customized loan offerings.
4 Being linked to CGTMSE, the platform offers MSME borrower collateral-free loan.
5. GST inputs, ITR, bank statement, fraud check etc. quicken the credit decision making process for the financial institution.
Documents required to apply for loan up to Rs. 1 crore MSME loan
1 GST Identification Number
2 Income tax returns in XML format
3 Bank statement for last six months
4 Other details of the owners or directors in the MSME such as personal details, ownership and education.
5 - In-principle Approval in 59 minutes