SBI sanctions Rs 20,000 cr loans to MSMEs under credit guarantee scheme

State Bank of India (SBI) has sanctioned loans worth Rs 20,000 crore to over 400,000 micro, small and medium enterprise (MSME) accounts under the Emergency Credit Line Guarantee Scheme (ECLGS), according to its chairman Rajnish Kumar.

The scheme, funded by the Centre, provides guarantee for 20 per cent additional credit to the bank’s existing eligible borrowers from the MSME segment. It is part of the Rs 20 trillion package crafted to revive the economy disrupted by the lockdown imposed to contain the coronavirus (Covid-19) pandemic.
 

According to SBI’s call with analysts after the Q4FY20 results, it had 800,000 eligible borrowers under the credit guarantee scheme. The eligible amount was estimated at Rs 29,000-30,000 crore, which is 20 per cent of the Rs 1.5 trillion portfolio. SBI’s SME loan portfolio shrunk by 7.27 per cent to Rs 2.67 trillion in March 2020 from Rs 2.88 trillion in March 2019.

The new definition of MSMEs, which includes both turnover and investment limits, has made things simpler. It will lead to improved flow of credit to the sector, Kumar said while addressing a session organised by the Confederation of Indian Industry (CII) on ‘International MSME Day’. He interacted with the MSME industry through a virtual platform.

The SBI chairman said the credit guarantee scheme for MSMEs under the ‘Atmanirbhar Bharat’ will reduce the pain of the sector, which has come under stress in the aftermath of the Covid-induced crisis.

On the issue of financing, he said that SBI was increasingly utilising digital technology platforms to enable hassle-free credit flow to the MSME industries.

Data from good and services tax (GST) filings, income tax returns and analytics is helping the lender in classifying and disbursing credit. It encouraged the enterprises to utilise these digital platforms as it will help them in getting better access to credit.