Public Sector Banks – Bada Business

MSME Credit Moves Towards Pre-Pandemic Levels, Witnesses a Growth of 5.7%: Report

The latest MSME Pulse Report by TansUnion CIBIL shows that the credit in the Micro, Small and Medium Enterprises have witnessed a growth owing to the support of central government’s Emergency Credit Line Guarantee Scheme (ECLGS). As per the recent report, the MSME credit grew by 5.7 per cent YoY and around 3.5 QoQ in September 2020. The report also indicated that the Public Sector Banks are progressively taking the lead in providing quick loans and credits to the MSME sector, thereby ensuring an increased market share for themselves. Not only the PSBs, even the private sector banks are moving back to the pre-COVID-19 levels, with 22 per cent YoY growth in inquiries in December 2020. For the public sector banks, the same was recorded at 9 per cent. Indian SMEs Plan To Expand Businesses As Economy Revives, Restoration of Business Activities Likely To Gain Momentum Post COVID-19 Era: Survey.

Meanwhile, the inquiry trends in Commercial credit touched pre-COVID levels of 13 per cent in December 2020 after experiencing a sharp plunge in April 2020 owning to the coronavirus outbreak and the subsequent economic lockdown. The total on-balance sheet commercial lending exposure in India stood at Rs 71.25 Lakh Crore with a growth rate of 2.1 per cent YoY as in September 2020. As per report, for MSME sector it stood at Rs 19.09 Lakh Crore with a yearly growth rate of 5.7 per cent in all the sub segments of micro, small and medium enterprises. The Centre released the 17tth Installment of GST Compensation: What it means for States & UTs?

As per the MSME Pulse Report, the high risk MSME borrowers with a CIBIL rank between 7 to 10 secured the maximum benefits from the rise in approval rates. Meanwhile, the NPA (Non-Performing Asset) ratio saw a decline to 12.1 per cent in September 2020. It is being reasoned as a consequence of the Supreme Court order of not declaring NPAs till further notice. Moreover, as per a finance ministry release, total loans sanctioned under ECLGS stand at Rs 2.1 Lakh Crore of which Rs 1.65 Lkah Crore has already been disbursed.

Government and its various agencies have undertaken several programmes and initiatives to promote the Medium, Small and Micro Enterprises and boost the sector. One such step is the 59-Minute Loan Approval Scheme for the MSME sector by the Public Sector Banks (PSBs). As per the recent data issued by the Ministry of Micro, Small and Medium Enterprises over 2 lakh loans were approved by the public sector banks till February 1, 2021 under this scheme. 2,23,501 loans worth Rs 72,502 Crore have been sanctioned by various public sector banks since the launch of the scheme in November 2018. From the total approved amount, around Rs 59,548 Crore have also been disbursed to the MSMEs as well. SMBs in India To Benefit As Google Announces Rs 109 Crore for Small and Micro Enterprises in the Country.

The 59-Minute loan approval scheme primarily focuses on individuals and the MSMEs with the aim to ensure easy credit to both of them. It undertakes the automation and the digitisation of the the various steps involved with the loan sanction activity to speed up the entire process and the credit gets approved by the public sector bank in less than 59 minutes. Terms and conditions are flexible and the borrower has the option to choose from various public sector banks. It provides various types of loans including working capital loan, mudra loan, term loan among others are offered to MSMEs under this scheme.

Business loan with the principal amount ranging between from Rs 1 Lakh to Rs 5 Crore are offered under the scheme. The borrower may or may not be asked to provide for collateral depending upon the loan amount. A minimum interest rate starting from 8.5 per cent is charged on the principal amount. Mudra loan are currently being provided for Rs 10,000 to Rs 10 Lakh. It is integrated with the government’s Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to check borrower’s eligibility. Startups and MSMEs in India Get Major Boost As Indian Bank Signs MoU With SID of IISc for Extending Exclusive Credit Facility to Businesses.

In order to avail the loans under this scheme, an MSME is required to provide its GST Identification Number, Income Tax Returns, six-month bank statements, and owner’s details including personal, educational information and the ownership details of the enterprise. If an MSME is able to furnish all the required documents, it can easily apply for credit through the 59 Minute Loan Approval Scheme.