Growth in 59-Minute MSME Loan Scheme Remains Sluggish Despite Sector Expansion

New Delhi, Sep 7 (KNN) In a recent development, the Indian government's 59-minute loan approval scheme for Micro, Small, and Medium Enterprises (MSMEs) has shown marginal growth, according to official data from the MSME Ministry's Dashboard.

As of August 30, 2024, the scheme has sanctioned 2.49 lakh loans amounting to Rs 86,820 crore, representing a modest increase of 1.21 percent from the previous year. This follows a similar pattern observed in the preceding year, where sanctions grew by only 2.27 percent.

The disbursement figures paint a similar picture, with a mere 0.8 percent increase to 2.30 lakh loans totalling Rs 69,926 crore as of August 30, 2024, compared to 2.28 lakh loans worth Rs 68,729 crore disbursed by September 1, 2023.

The scheme, launched in November 2018, is facilitated by the digital lending platform Online PSB Loans. It offers in-principle bank approval for collateral-free term loans or working capital loans to MSMEs, ranging from Rs 10 lakh to Rs 5 crore, within 59 minutes.

Despite the subdued performance of this specific scheme, the broader MSME loan landscape in India shows significant growth.

A report by credit bureau CRIF High Mark, released on September 5, 2024, indicates that India's overall MSME loan portfolio expanded by 17.8 percent, reaching Rs 64.1 lakh crore as of March 2024.

The report further reveals that in the fiscal year 2024, a total of 2.74 crore MSME loans were originated, amounting to Rs 54.2 lakh crore.

This represents a substantial increase of 19.3 percent in volume and 5.4 percent in monetary value compared to the previous fiscal year.

These contrasting trends suggest a divergence between the performance of the government's targeted scheme and the overall MSME credit market, potentially indicating a shift in lending patterns or preferences within the sector.

(KNN Bureau)