Ever since its launch in November 2018, the 59-minute loan portal has experienced a notable increase in the credit approved via the collaborative MSMEs-PSB loans in 59 Minutes initiative, a venture of the government and the Small Industries Development Bank of India (SIDBI). As of August 1, 2023, the sanctioned credit amounts to 246,997, totaling Rs. 85,054 crore (US$ 10.23 billion).
Data from the MSME Ministry’s dashboard reveals that out of the sanctioned loans, 228,118 loans, equivalent to Rs. 68,636 crore (US$ 8.25 billion), have been disbursed. This marks an increase from the previous year’s data, where by July 2022, 224,002 loans amounting to Rs. 66,471 crore (US$ 7.99 billion) were issued.
Under the loan portal, MSMEs can secure business loans ranging from Rs. 1 lakh to 5 crore (US$ 1,203.34 to 601,670), based on their preferences and chosen lender. After receiving digital approval, the chosen lender decides whether to sanction or disburse the loan amount. While there is no registration fee, borrowers are required to pay Rs. 1,000 (US$ 12.03) for digital approval if their loan proposal aligns with the lenders’ packages.
The loan disbursement time frame is determined by the submitted information and documentation, both on the portal and with the selected bank. Generally, the loan is approved and released within 7-8 working days post digital approval. While collateral security isn’t mandatory for loan application, the bank retains the option to request it.
In addition to Mudra loans, MSMEs can utilize the scheme to acquire term loans and working capital for various purposes, such as equipment purchase, technological advancement, product line expansion, raw material procurement, and infrastructure development.
According to data from the Reserve Bank of India, the MSME sector’s share of non-food bank credit has seen an increase. In June 2023, it accounted for Rs. 21.14 lakh crore (US$ 250 billion), which constituted 14.7% of India’s total non-food bank credit worth Rs. 143.6 lakh crore (US$ 1.73 trillion). This was up from Rs. 20.20 lakh crore (US$ 240 billion), or 14.5% of total non-food bank credit worth Rs. 138.5 lakh crore (US$ 1.67 trillion) in May 2023.
