Credit and financing for SMEs: The scheme provides a loan of up to Rs 5 lakh to women and micro-entrepreneurs at the bottom of the pyramid at an affordable rate, according to SIDBI.

Credit and Financing for SMEs: Small Industries Development Bank of India (SIDBI) said on Monday that more than Rs 276 crore of loans have been disbursed under its Prayaas program to more than 18,000 small entrepreneurs “who are at livelihood level and aspiring to an enterprise level The scheme provides credits of up to Rs 5 lakh loan in partnership with financial and non-financial intermediaries to women and micro entrepreneurs at the bottom of the pyramid at an affordable rate, SIDBI said in a statement.

SIDBI has set aside a specific corpus of Rs 1,000 crore for the program to provide loans for subsistence activities at interest rates not exceeding 13 percent, according to program details available on SIDBI’s website. Addressable credit demand of Rs 11.90 lakh crore in the micro-enterprise segment, female entrepreneurs representing about 20 percent of the total ownership stakes in India, and the cost of micro-credit remaining on a higher side are reasons driving SIDBI to engage in targeted interventions. to support entrepreneurs in their livelihood, the bank noted.

In order to digitize the Know-Your-Customer (KYC) process and the process of e-signing and e-stamping various documents from borrowers, SIDBI had also launched the Digital Prayaas scheme in August 2021. Under the arrangement, SIDBI had also linked up with BigBasket to onboard its delivery partners across the country and provide loans for the purchase of e-bikes and e-vans.

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In order to support rural micro and small enterprises, SIDBI had also announced in January this year that it would penalize Rs 650 crore in financial aid to two small financial banks – AU Small Finance Bank and Jana Small Finance Bank to enable credit to Covid-affected units through low-rated or small unrated non-banking financial corporations (NBFCs) and microfinance institutions (MFIs).

SIDBI’s recent schemes have been launched against the background of the Covid impact on SMEs. According to a survey of a random sample of 1,029 SMEs in 20 states and two union territories, conducted by SIDBI late last year and announced in January this year, 67 percent of SMEs had reported temporary closures for up to three months during Covid in the fiscal year 2020-21. Also, about 66 percent of units reported a decline in profitability due to stable fixed costs and a decline in sales. The survey results were shared by MSME minister Narayan Rane in response to a question in Lok Sabha in February.

This post SIDBI: More than Rs 276 crore of loans disbursed to 18,000 small entrepreneurs under Prayaas scheme

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