State Bank of India and Small Industries Development Bank of India (Sidbi) have lowered interest rate on loans extended to micro, small and medium enterprise (MSMEs).
SBI said it has brought down the interest rate for working capital loans to micro, Small & Medium Enterprises (MSMEs) with immediate effect. Effective from December 16, the country’s largest bank has lowered the rates by 50-100 basis points.
With this reduction, the micro enterprises will be able to avail working capital finance at as low as 10.25 per cent. “This reduction has been brought about for SSIs as well as larger manufacturing MSMEs, with working capital limits upto Rs 10 crore,” SBI said in a statement.
Sidbi has lowered its benchmark prime lending rate by 150 basis points to 12.5 per cent following the Rs 8,000 crore refinance window opened by the Reserve Bank of India to boost credit flow to
Sources close to the development said the PLR will be effective from December 15 but Sidbi will ensure that a bulk of the funds are made available at sub-PLR rates.
When contacted, Sidbi Chairman and Managing Director RM Malla confirmed the development and said, “Thanks to the help from the government and RBI, our cost of funds will come down and we will pass on the benefits to the borrowers.”
Sidbi sources said that the institution will make a bulk of the additional Rs 7,000 crore refinance announced by RBI earlier this month available to MSMEs directly or through state finance corporation.
