Indian MSMEs can now get a loan approved in just 59 minutes

• Prime Minister Narendra Modi eased the loan application process for micro, small and medium enterprises (MSMEs) by launching a ‘59-minute portal’ on Friday.
  
• The digital initiative will allow the owners of MSMEs to get approval for a loan in less than an hour instead of the 20-25 days that it took earlier.
  
• The pilot experiment of the project has already sanctioned 72,000 loan applications.

Micro, small and medium enterprises (MSMEs) in India have been under pressure since demonetisation stagnated economic activity due to the sudden liquidity crunch followed by India’s indirect tax reform, when the Good and Services Tax (GST) was implemented.

In order to energise businesses in this segment and provide the necessary capital, India’s Prime Minister, Narendra Modi, unveiled a digital platform which will prevent small enterprises from going through a lengthy procedure for credit requirements.

The launch of the 59-minute portal to support small industries was a part of the Indian Government’s ‘support and outreach initiative’ for MSMEs. While addressing the programme, Modi claimed that the project has already crossed its target of approving 72,000 loan applications in its pilot stage.

As of now, loans worth ₹230 billion have been approved through the digital portal.


The digital initiative will substitute the processing time of 20-25 days to just 59 minutes making it easy for owners of MSMEs to get there loans sanctioned without visiting banks. In fact, the users of 59-minute portal can apply for loan of upto ₹10 million and expect it to be dispersed in 7-8 working days after the in-Principle approval letter is issued.

So, how do you get your loan approved?

All the small enterprises which are registered under the GST policy are eligible for a loan by registering on the portal. Although, there is no fee for registration but ₹1,000 along with taxes are charged once the loan applicant finds a lender on the portal.

In order to apply for a loan the applicant has to submit a six month bank statement, e-KYC documents, income tax returns for the past three years, GST ID, and business owner’s details.

Small industries can avail a loan between ₹1 million to ₹10 million against an interest starting from 8%.

Union Government has already asked Reserve Bank of India to relax the norm for weaker banks thereby allowing the MSMEs to resume borrowing from them but the 59-minute portal has been set up by the Small Industries Development Bank of India (SIDBI).

The Government of India has been taking initiatives to protect MSMEs in India which went through cash-crunch issue due to demonetisation and taxation reforms.The outreach program is supposed to run for next 100 years aiming to cover each and every corner of India.