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MSME Loan Upto Rs 1 Crore In 59 Minutes Research Team | Posted On Tuesday, November 06,2018, 12:22 PM

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MSME Loan Upto Rs 1 Crore In 59 Minutes



Prime Minister Narendra Modi launched a very important scheme on November 2nd 2018. This scheme aims to be the support of MSME in India. Micro-Small and Medium Enterprises are the backbone of growth in the country. This scheme was launched at Vigyan Bhavan in New Delhi.

Salient features of the scheme: PM Modi says get a Rs 1 Crore loan in 59 minutes. This is Narendra Modi’s Diwali Gift to the MSME Sector in India. A dedicated digital platform to help MSME’s secure and get loan approval of up to Rs 1 Crore in just 59 minutes.

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MSME Loans

Importance of MSME in India:

Next to agriculture, MSME is the most important sector in India. MSME generates 12 Crore jobs through the 6.5 Crore units spread across the country. MSME contributes 38% to India’s GDP (Gross Domestic Product). It also commands 40-45% of the overall exports and manufacturing output of the country. MSME is involved in the manufacturing of more than 6,000 traditional and hi-tech items.

What is MSME Loan?

A MSME loan is availed by micro, small and medium enterprises to start, expand, or improve a business. MSME is run by entrepreneurs who offer various products and services. MSME loans have tenure of 1-3 years.

MSME loans are very useful for women who can set up the day care business, flower shops, tailoring, catering and the grooming business.

MSME loan eligibility:

  • The loan amount is between Rs 10 Lakhs and a Crore. It gets disbursed in 7-8 working days.
  • The online portal of the scheme is connected to Credit Guarantee Fund Trust for Micro and Small Enterprises scheme. There’s no need for collateral.
  • There is no payment for registration. If the borrower’s proposal matches the bank’s products, the borrower will have to pay a fee of Rs 1,000 + taxes.
  • Businesses which have sales above Rs 500 Crores would be on the trade receivables e-discounting system platform.
  • Small vendors can access funds from lenders based on the receivables which get reflected on the platform.

SEE ALSO: Child Aadhaar Enrolment

MSME Loan Documents Required:

  • You have to submit a 6 months bank statement in PDP Format.
  • E-KYC Paper
  • ITR for 3 years which must be in XML Format. You also need Income Tax codes and e-filing details.
  • The business would have to provide GST ID username and password.
  • The business must show ownership papers. All applicants would have to submit personal and educational details.

MSME Loan Interest Rates:

Interest starts at 8%. There is a 2% interest subsidy on loan payments by MSME. There is a 5% rebate on interest on loan payments by exporters.

SEE ALSO: Functions Of Commercial Banks

MSME Loan Up to Rs 1 Crore in 59 Minutes:

  • MSME’s can get loans up to Rs 1 Crore in 59 Minutes.
  • GST registered MSME’s enjoy interest benefits.
  • MSME’s enjoy tech support via 20 hubs and 100 Spokes.
  • CPSE have to mandatorily procure 25% from MSME’s. Out of the 25%, at least 3% must be done from women-led MSME’s.
  • All CPSE’s will have to join the Government e-Marketplace.
  • There would be pharma clusters where 70% of the cost would be borne by the Centre.
  • Returns due to 8 Labor Laws and 10 Rules to be filed only once instead of twice.
  • End inspector Raj and ensure transparency in MSME.
  • Easy environmental clearance and consent to establish.
  • An ordinance for simplifying levy of penalties for minor offenses.
  • Social security for MSME employees. MSME employees would have PMJDY accounts, provident fund and insurance.

MSME Loan apply online:

  1. Visit the official website at Complete the sign in process and also fill name, email-id and mobile number. You then click “Get OTP”.

2. You then type the OTP which is sent to your mobile number. You then tick the “I agree” box and click “Proceed”.

3. Once the next screen arrives, you would be prompted to answer a few basic questions. You then tick all the boxes and select “I am a registered MSME and I agree with the above selected point” You then click proceed.

4. GST Details: When the next screen arrives, enter GST details like username, number and password. You provide tax details in the XML Format. You can also login with ITR details like PAN and date of incorporation.

5. Submit bank statements: You can upload bank statements or log in with net banking credentials. You will have to fill Directors details, Company address and Proprietors details.

6. You state the purpose of the loan: You need to furnish details and state the purpose of the loan. You will have to furnish the details of the previous loans you have availed.

7. You then select the bank: A list of banks would be provided to you. You then select the bank where the loan amount is to be processed.

8. There is a convenience fee. This would be Rs 1,000 + taxes.

9.  You have paid the fees? Great, it’s time to download the approval letter.

Why MSME Scheme?

  • MSMEs can easily get credit and reduce cost of funds.
  • Cash flows are smoothened based on trade receivables.
  • NBFCs are facing a liquidity crunch after the IL&FS default. Banks have the bad debts problem, hampering the capacity to lend. This loan scheme should help MSME’s get the loans they need.
  • MSME’s face a lot of problems regarding environment and labor regulations. MSME loan scheme solves these problems.
  • MSME’s faced a lot of problems after demonetization and GST. Then the bank loan problem and the NBFC crunch. This scheme has come in time for the MSME, though MSME’s are hoping for the loan amount to be raised from 1 Crore to at least 25 Crores.

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