Small Industries Development Bank of India (SIDBI) has said it would provide funds to Micro, Small and Medium Enterprises (MSMEs) via banks, Non-Banking Financial Companies (NBFCs) and other finance institutions.
“We are working towards helping MSMEs survive the crisis created due to the COVID-19 pandemic. Keeping the current situation in mind, we were provided a special liquidity window of Rs 15,000 crore by the Reserve Bank of India (RBI) to enable MSMEs to tide over their liquidity crunch. The funds will be channelized to MSMEs through eligible banks, NBFCs and MFIs,” Sidbi’s chairman and managing director Mohammad Mustafa said in a release.
The liquidity will be offered to banks, NBFCs and MFIs as term loans for a tenor of 90 days and for a maximum period of one year, Sidbi said.
”With this facility, MSMEs liquidity issues shall be addressed, timely and adequately,” the release added.
On April 8, SIDBI had announced to provide emergency working capital against confirmed government orders, under which revolving working capital term loans shall be provided of up to Rs 1 crore.
According to a release, the new loan product, SIDBI Assistance to Facilitate Emergency response against coronavirus (SAFE) plus will be offered collateral free and disbursed within 48 hours.
The loans will be offered at an interest rate of 5 per cent.
SIDBI further said it had enhanced the loan limit for MSMEs to Rs 2 crore under its SAFE initiative.
“The limit of SAFE loans, which was launched a few days back, has been enhanced from Rs 50 lakh to Rs 2 crore for executing government orders by those MSMEs which are eligible under the respective state government’s special policy package for interest subsidy/subvention or capital subsidy,” the release said.