Credit and finance for MSMEs: The scheme offers credit up to Rs 5 lakh loan to women and micro-entrepreneurs at the bottom of the pyramid at an affordable rate, according to SIDBI.

Credit and financing for MSMEs: The Small Industries Development Bank of India (SIDBI) said on Monday that over Rs 276 crore in loans had been disbursed under its Prayaas scheme to over 18,000 small entrepreneurs “who are at subsistence level and aspire to achieve a enterprise level”. The scheme offers credit 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 a dedicated corpus of Rs 1,000 crore earmarked for the program aimed at providing loans for livelihood activities at interest rates not exceeding 13%, according to program details available on the SIDBI website. The demand for addressable credit of Rs 11.90 lakh crore in the micro business segment, women entrepreneurs accounting for about 20% of total business owners in India and the cost of micro credit remaining higher are the reasons driving SIDBI to deliver targeted interventions to support entrepreneurs in the livelihood space, the bank noted.

In order to digitize the Know-Your-Customer (KYC) process and the process of electronic signature and electronic stamping of various borrower documents, SIDBI had also launched the Digital Prayaas program in August 2021. Under this program, SIDBI had also linked with BigBasket to onboard its delivery partners across the country and provide loans for the purchase of e-bikes and electric vans.

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To support rural micro and small enterprises, SIDBI had also announced the provision of financial assistance of Rs 650 crore in January this year to two small financial banks – AU Small Finance Bank and Jana Small Finance Bank to enable credit to Covid-affected units through low ratings or small non-bank financial companies (NBFCs) and unrated microfinance institutions (MFIs).

SIDBI’s recent programs were launched against the backdrop of the impact of Covid on MSMEs. According to a survey of a random sample of 1,029 MSMEs in 20 states and two union territories conducted by SIDBI late last year and announced in January this year, 67% of MSMEs had reported closure. temporary for up to three months during Covid in fiscal year 2020-21. In addition, about 66 percent of units had reported declining profitability due to flat fixed costs and lower revenues. The results of the survey were shared by MSME Minister Narayan Rane in response to a question to Lok Sabha in February.