Here’s how you can apply for an MSME business loan and get approval in 59 minutes
The scheme for PSB loans in 59 minutes was launched to make access to capital easy for the MSMEs. The loan is easy to avail with no human intervention for the sum from Rs 1 lakh to Rs 5 crore, with the rate of interest starting from 8.5 percent onwards.
Access to credit is one of the most common issues faced by micro, small, and medium enterprises (MSMEs) of India. Although the sector is referred to as the ‘backbone of the Indian economy’ — contributing to 31 percent of India’s GDP and 48 percent of exports, the foremost issue it faces is that of the working capital crunch.
The size and nature in which the MSMEs operate create a hassle for them to upgrade in the business ecosystem. Hence, even with big names in the Indian market like Hindware, Goldmedal Electricals, and SLR Metaliks relying on MSMEs for raw materials and manufacturing, the status of the sector remains inconsequential.
The year 2018 saw a wave to bolster this large yet tiny segment amid the booming startup culture. Prime Minister Narendra Modi announced several initiatives to enhance credit access and boost employment for the MSMEs. He launched a portal where small enterprises can avail loans of up to Rs 1 crore in just 59 minutes, where the in-principle limit was extended to Rs 5 crore in July 2019.
By March 2019, the portal had become the country's largest online lending platform after sanctioning loans worth over Rs 35,000 crore.
The pandemic problems
It is said that uncertain times lead to adequate measures. Though the coronavirus pandemic hit the Indian businesses severely, it also showed a path towards digital transformation, which perhaps could have taken another half-a-decade to surface.
Digital adoption enabled these businesses to breathe in the crucial time of the pandemic. However, as the manufacturing units were shut and exports were halted, it was a tough time for the MSMEs to sustain the business with a severe cash crunch.
For all the MSME entrepreneurs, this was the time to fight hard and make sustainable business decisions with the help of the schemes offered by the government.
According to the latest data shared by the government, 2,12,091 loan applications involving Rs 66,991 crore have been sanctioned as of August 31, 2020, under 59-minutes loan scheme. However, a large number of MSMEs still lag behind to avail the benefits of the scheme.
Last year in August, State Bank of India (SBI) Chairman Rajnish Kumar said that the awareness about this scheme is yet to reach the targeted audience and that it can prove to be a powerful lending platform.
What is PSB loan in 59 minutes?
With automation and digitisation being at its core, the PSB web portal is designed to make the overall process of fundraising for MSMEs easy. Entrepreneurs who want to expand their business, purchase plant or machinery, upgrade technology, purchase raw materials, scale operations, expand service, or more; can avail these loans.
Business loan and in-principle approvals with/without collateral are provided for the sum from Rs 1 lakh to Rs 5 crore, with the rate of interest starting from 8.5 percent onwards. The platform is integrated with Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to check the eligibility of the borrowers.
How to apply for MSME 59-minutes loan?
The loan application is made completely digital, without the hassle of visiting the bank. Here are the steps to apply for PSB 59-minutes MSME loan:
- Visit the web portal- psbloansin59minutes.com
- Register your account by entering essential details like your full name, email address, mobile number and a one-time password (OTP).
- Answer the basic questions asked on the screen after registering.
- You will be asked to enter the GST number.
- In the next screen, you need to upload your income tax returns in XML format, or login using details such as your PAN and date of incorporation.
- At the next step, you need to upload your bank account statement of the last six months in PDF format. Download this statement by contacting your bank or logging into your net banking account.
- Enter the details of the director or proprietor, ownership details and company/business address.
- Enter the purpose of your loan, and any existing or past loans you have taken for your business.
- Once you enter the above details, you will be asked to choose the bank of your choice. Please note that interest rates may vary from bank to bank.
- In the end, you need to pay the convenience fee of Rs 1,000 plus taxes to complete your application.
Once the process is completed and the payment is done, you will be given an in-principle approval of loan within 59 minutes. Post the in-principle approval, the time taken for loan disbursement depends upon the information and documentation provided by the borrower. It usually takes seven to eight working days for the sanction of the loans.
The PSB loan bankers and lenders include SIDBI, State Bank of India, Bank of Baroda, Punjab National Bank, ICICI Bank, YES Bank, UCO Bank, Kotak Bank, Federal Bank, Canara Bank, and other leading banks.
Edited by Kanishk Singh