The MSME entrepreneurs are in for some good news with the announcement coming from the Union Finance minister about a dedicated portal that has been launched to fast-track loans catering to their sector. The government has come out with an assurance that will facilitate banks to approve loans up to INR 1 crore within a short span of 59 minutes. The entrepreneurs availing this facility will not be required to visit any of the bank branches to acquire the loan.
The MSME entrepreneurs are required to furnish their GST and income tax returns besides bank statements to stay eligible for speedy sanction. The gestation period for the loan to be available with the entrepreneur is only eight days, disclosed Rajiv Kumar, Financial Services Secretary.
The government body Sidhi has established the portal in collaboration with banking institutions including SBI, PNB, Bank of Baroda, Indian Bank and Vijaya Bank. The endeavour will receive further support as more banks are expected to jump into the fray in the near future.
The facility implies that on submission of the online form along with the required details a single gateway will integrate all the procedural issues including back-end checks that precede the sanctioning of the loan. The system of checks and balances will involve the ministry of corporate affairs and credit information bureau.
The measure, in addition to promoting MSME ventures is also intended to incentivize the entrepreneurs to become a part of the formal economy. The feature requiring the fast-track loan users to link their GST and tax returns to their loan approval documents is expected to bring about the desired change. The new government endeavor compounded with existing MSME schemes like MUDRA is expected to ease the access of funds for small businesses for driving growth and employment.