MSMEs to get Rs 1 cr loan in 59 minutes

The Prime Minister, Shri Narendra Modi visiting an exhibition stalls, at the launch of the Support and Outreach Initiative for MSMEs, in New Delhi on November 02, 2018.

Prime Minister Narendra Modi, last evening, announced a slew of measures including sanction of loans of up to Rs 1 crore to small and medium enterprises in 59 minutes through a special portal to give a boost to the nation’s second biggest employing sector. GST-registered small and medium enterprises (MSMEs) can now avail of this facility. Also, GST-registered MSMEs will get 2 per cent interest subvention or rebate on incremental loan of up to Rs 1 crore.

He made these announcements while launching a historic support and outreach programme for the Micro, Small and Medium Enterprises (MSME) sector. As part of this programme, the Prime Minister unveiled12 key initiatives which will help the growth, expansion and facilitation of MSMEs across the country.

The Prime Minister said that these 12 decisions will mark a new chapter for the MSME sector. Noting that MSMEs are one of the principal employment generators in India, the Prime Minister recalled the glorious Indian traditions of small scale industry, including Ludhiana’s hosiery, and Varanasi’s sarees.

He detailed that there are five key aspects for facilitating the MSME sector. These include access to credit, access to market, technology upgradation, ease of doing business, and a sense of security for employees. He said that as a Diwali gift for the sector, the 12 announcements he is making, will address each of these five categories.

As the first announcement, the Prime Minister announced the launch of the 59 minute loan portal to enable easy access to credit for MSMEs. He said that loans uptoRs. 1 crore can be granted in-principle approval through this portal, in just 59 minutes. He said a link to this portal will be made available through the GST portal.

The second announcement as a 2 percent interest subvention for all GST registered MSMEs, on fresh or incremental loans. For exporters who receive loans in the pre-shipment and post-shipment period, the Prime Minister announced an increase in interest rebate from 3 percent to 5 percent.

The third announcement was that all companies with a turnover more than Rs. 500 crore, must now compulsorily be brought on the Trade Receivables e-Discounting System (TReDS). This portal will enable entrepreneurs to access credit from banks, based on their upcoming receivables. This will resolve their problems of cash cycle, he added.

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