SIDBI Offers Automated Credit Upto Rs 1 Cr For Machinery Under Express Loan

New Delhi, Nov 22 (KNN) Small Industries Development Bank of India (SIDBI) has introduced the concept of Express loan for Machinery which provides term loan assistance upto Rs 1 crore to MSMEs both in manufacturing and services sector for purchase of machinery/equipment through a completely automated and system driven process.

Sivasubramanian Raman, CMD, SIDBI on Tuesday mentioned about this concept wherein MSMEs which are registered under GST, have a valid Udyam registration and have filed IT returns for last 3 years are eligible for the loan under the scheme.

He was presiding over a consultation meeting for MSMEs and start-ups at The Leela Ambience, Gurugram.

The event was attended by Vivek Joshi, Secretary, DFS, Ministry of Finance as chief guest and Subhash Chandra Lal Das, Secretary, Ministry of MSME as guest of honour.

Raman further claimed that the number of Electric Vehicles (EVs) is estimated to reach 90 million by 2023 and that SIDBI is prepared to enter the industry by providing credit throughout the whole EV value chain.

Appreciating SIDBI's contribution in MSME growth, representatives of MSMEs and industrial associations suggested that SIDBI go beyond collateral-based financing and instead perform loans based on cash flow and GST transactions in the future.

The event also reflected on the issue of foreclosure and prepayment charges, which are substantial impediments to MSMEs' financial growth.

Rakesh Chabra, President RAI Industrial Association and Vice-President FISME proposed that a MSME focused credit card should be introduced so that all payments that MSMEs incur in their operations up to a limit of Rs 10 lakhs could be done through the credit card.

Subhash Chandra Lal Das, Secretary, Ministry of MSME said at the event that given its legislative mandate, SIDBI is uniquely positioned to serve the interests of MSMEs.

Furthermore, he stated that the convergence among various government agencies is spurred by the sense that the government must deliver as a whole, and that MSMEs must harness and utilise this ecosystem in their benefit.

Vivek Joshi, Secretary, DFS, Ministry of Finance highlighted the importance of greater financing to the MSME sector and the role of SIDBI. He emphasised credit guarantee fund programmes, including the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSME) and the Credit Guarantee Fund for Micro Units (CGFMU).

“The central government has allocated Rs 9000 crore in the CGTMSME and CGFMU funds in the budget this year and this is expected to provide additional collateral-free guaranteed credit of Rs 2 lakh crore,” he said.

(KNN Bureau)