Small and Medium Enterprises (SMEs) employs around 59% of the country’s population, and contributes significantly to India’s economy. In an approach to provide faster advances to these small and medium scale enterprises, the Government of India has launched the 59-minute loan. Under this scheme the Government offers SME loan of up to Rs. 5 Crore from financial institutions and NBFCs.
This scheme reduces the time involved in the application process to streamline the process. Applicants can apply via the online portal. After the application gets approved, the loan amount is disbursed within 7 to 8 working days.
The 59-minute loan scheme attracted significant interest amongst business owners across the nation. It also showed a substantially high approval rate; according to the latest audit report, more than two-thirds of the loan application under this scheme has been approved.
Benefits and features of the 59-minute scheme
- Loan amount: Applicants can enjoy substantial loan amount from Rs. 1 Lakh to Rs. 5 Crore depending on their requirements.
- Documentation process: Similar to the documents required for a business loan, to bring in faster approval, advances are availed against minimal documents.
- Online portal: Borrowers get to enjoy faster approvals and can access the online portal on which they can apply for credits, check the status of their application, etc.
- Interest rate: Individuals get to enjoy a lower SME loan interest rate, which starts from 8.50% depending on the repayment capability and stability of the applicant.
To qualify for advances under this scheme, you have to meet some eligibility criteria; here are some of those –
- The firm should be registered under GST to be eligible for the credit.
- Applicants should have a good repayment history on previous credits.
- Borrowers should cater to the criteria set by the lender.
- Individuals should have a strong repayment capability and should have a regular source of income.
- You should also maintain an ideal credit score when applying for loans under this scheme.
The papers that you have to furnish to avail a lower SME loan interest rate are –
- Applicants have to provide their KYC documents like Aadhaar card, PAN card, driving license, passport, voter ID, etc.
- Borrowers should share their GST details like GST user name and GST identification number or GSTIN. You can register for GST online on the official GST portal. After application, you will receive your GST certificate and GSTIN within three working days.
- You will have to provide your account statements of the last six months while applying for the loan.
- Individuals also have to provide their income tax returns for the past three years to get approved for the credit.
Applicants will have to scan and upload the above mentioned documents on the online portal at the time of application.
Individuals can apply for an SME loan under this scheme by following the below mentioned steps.
- Visit the official portal of the 59-minute loan scheme.
- Complete the registration process by sharing details like your name, mobile number and email-id.
- You will receive an OPT on the provided contact number after providing your personal details. Enter the OTP to proceed.
- Read the terms and conditions displayed on the screen and click on ‘Agree.’
- Provide the required personal and financial information like date of birth, annual income, etc.
- Generate a password that you can use every time you log in the portal.
There are several financing options available, including Government backed schemes and non-banking financial institution which offer credit under this scheme. You can also apply for other forms of credit from lenders.
Apart from the above, borrowers can enjoy tax benefits for SME loan availed under this scheme. Also, multiple financial institutions and NBFCs offer loans under this scheme, thus making such advances easily available to the borrowers.