Loan channels open up for SMEs

Interview

Arvind Sonmale, managing director & CEO, of GTF gives loans the e-dge.

How will your e-loan procedure work?

The e-loan is a simplified online programme enabling SSI units to apply and obtain instant sanction of export factoring facilities. The eligible user just needs to fill in the standard application form on GTF's web-site with the basic details and submit it by clicking on the "submit" button to obtain an instant sanction.

Once the sanction is obtained, the user can approach the nearest office of GTF with documentary evidence to validate the data submitted by him in the E-Loan application form. The list of GTF's offices and documents to be submitted for verification are also provided as part of the online sanction letter.

Is this just to fill forms online? If so, then how much time will it save?

As mentioned above, it is just not filling up an application form but a facility to obtain an instant decision on the application.

The user gets to know the limits sanctioned along with the terms of the sanction immediatelyupon completion and submission of the application form. What remains is validation of information submitted to GTF and execution of loan documents.

Will online loans be treated differently from other regular loans?
From the perspective of the SSI Units, the facility will work exactly like any other export factoring facility in GTF, except for the ceiling on the loan amount of INR 25 Mn.

Is there a limit to how much loan will be sanctioned online?

As of now, the maximum limit under this programme for an individual exporter is Rs 2.5 crore. The maximum limit for an individual buyer is Rs 1 crore.

These limits have been determined in consultation with ECGC who are providing export credit insurance for such facilities, on a portfolio basis.

How will the company conduct its due diligence?
The limits are computed based on the information submitted by the user and based on some pre-defined parameters. Thus, the credit parameters are taken care of by the backend of the software itself.

The online sanction is a firm indication of limits and draw-down of these limits is subject to the exporter providing documentary evidence to verify the correctness of the information submitted. The KYC requirements are also taken care of as a part of the verification process, very quickly.

What will be the interest rates? Will they be different for online customers?

Funding is available in INR/EUR/USD. The rate of interest for funding in INR is currently 9 per cent p.a., plus the cost of credit protection provided by ECGC at 0.5 per cent of the value of each invoice.

For funding in USD/EUR, the interest rate is 200 basis points over the corresponding LIBOR. We have endeavoured to offer competitive interest rates to the online customers keeping in view to promote exports of SSI Units.