SIDBI’s New Offering to MSMEs; Bring 25% Of Loan Amount, Avail Collateral Free Funds

New Delhi, Mar 22 (KNN) In a significant move to strengthen the MSME textile and garment industry, the Small Industries Development Bank of India (SIDBI) has signed two key memorandums of understanding (MoUs) with the Clothing Manufacturers' Association of India (CMAI) and the Sachin Industrial Co-operative Society (SICS). 

This initiative aims to provide financial and technical assistance to industrialists in the textile sector, facilitating access to collateral-free loans and government schemes.

Under the directives of the Government of India, SIDBI is collaborating with various institutions to support the industry. 

Special assistance will be provided for textile sector upgrades, including repairs and modernisation of water jet and air jet machines, as well as garment sector advancements under the MoU.

According to a press statement, "Entrepreneurs in the textile industry will have access to direct loans without the need for collateral. If collateral is unavailable, they can secure a loan by depositing only 25 percent of the total loan amount. 

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme previously offered collateral-free loans up to Rs 5 crore, but this limit is set to increase to Rs 10 crore as per the last budget announcement."

The statement further elaborated that "CGTMSE will provide funding support of up to 90-95 percent under this scheme. For loans up to Rs 5 crore without collateral, only 25 percent of the amount must be shown as an investment. 

Interest rates will range from 8.75 percent to 9.75 percent, depending on the unit's credit rating. SIDBI's funding process for new units will be completed within 30 to 45 days."

Mayur Golwala, secretary of SICS, said, "CMAI and SICS will set up SIDBI support centres in their offices. 

Dedicated staff at these centres will assist entrepreneurs with loan applications and processing. SIDBI will provide financial and technical support to these centres."

The MoU signing was attended by SIDBI Regional Office GM Naresh Babuta, DGM S. Muralidharan, Surat Branch DGM Akash Suman, Gujarat Regional chairman Ajoy Bhattacharya, and SICS president Nilesh Gami.

(KNN Bureau)