SIDBI steps up support to Covid-hit MSMEs with credit, mentoring, entrepreneurship promotion, more

SIDBI would enable loan sanctions under the scheme till September 2021 and disbursements up to December this year or notification of National Credit Guarantee Trustee Company (NCGTC), whichever is earlier.(Representative image)

Ease of Doing Business for MSMEs: MSME development bank SIDBI has rolled out multiple measures to further support small businesses in the country amid Covid. The apex bank engaged in the promotion of MSMEs has lowered the interest rate for its existing customers of Timely Working Capital Assistance to Revitalise Industries in Times of Corona Crisis (TWARIT) scheme under ECLGS from 8.25 per cent to 6 per cent. The scheme provided a working capital term loan at 6 per cent for the first year with nil promoter contribution and processing fee. SIDBI would enable loan sanctions under the scheme till September 2021 and disbursements up to December this year or notification of National Credit Guarantee Trustee Company (NCGTC), whichever is earlier.

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SIDBI is also considering launching a Swavalamban Challenge Fund and a Swavalamban Facilitation Center for handholding and mentoring, and providing credit to micro entrepreneurs in villages and small towns under its PRAYAAS scheme through microfinance institutions., it announced on Twitter. SIDBI facilitates small-ticket loans up to Rs 5 lakh at an interest rate of up to 13 per cent to ultimate borrowers under the PRAYAAS scheme with a dedicated corpus of Rs 1,000 crore, according to the scheme’s details.

“Through the various initiatives, we are planning to support the enterprise development cycle comprising ideation, setting up, revive and thrive as also stepping up. On one hand we are working towards identifying more livelihood entrepreneurs and on the other hand we are taking steps to build their capacity for emerging stronger,” said Sivasubramanian Ramann, Chairman and Managing Director, SIDBI in a statement.

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A Swavalamban Chair for MSME Solutions was also soft-launched by SIDBI at the Government Engineering College in Thrissur, Kerala to promote entrepreneurship among students. SIDBI had also engaged with MSME body Confederation of Indian Micro, Small and Medium Enterprises (CIMSME) for setting up Swavalamban Suvidha Kendra to address information asymmetry challenges among MSMEs and assist them in Udyam registration along with the adoption of digital solutions like Udyamimitra portal, Standupmitra portal, PSB Loans in 59 minutes, etc.

MSME has been among the most adversely affected sectors due to the Covid pandemic with many reporting severe business loss, temporary shutdowns, job losses, and acute working capital crunch. According to a survey of over 81,000 self-employed individuals and SMEs by the Consortium of Indian Associations (CIA) last month, 73 per cent SMEs couldn’t make a profit during the last financial year (FY21) while only 13 per cent broke even amid Covid impact. Moreover, 82 per cent respondents felt that the central and state governments weren’t looking after their interests and 88 per cent were yet to avail of any of the stimulus packages introduced by the government amid Covid till last month.

Nonetheless, SIDBI also announced setting up of Project Management Units based on the recommendations of the UK Sinha Committee on MSMEs to identify entrepreneurial opportunities for migrant population impacted by Covid through rapid profiling in 11 states including Uttarakhand, Delhi, Haryana, Rajasthan, Uttar Pradesh, Assam, Gujarat, Maharashtra, Karnataka, Andhra Pradesh, and Tamil Nadu. “The inputs are expected to facilitate decisions on entrepreneurial ventures at local/regional levels,” SIDBI said in a statement.