Small Industries Development Bank of India (Sidbi) is trying to extend a helping hand to the micro and small enterprises (MSEs) struggling to cope with the nationwide lockdown brought on by the coronavirus (COVID-19) pandemic. Sidbi says it is offering loans of up to ₹50 lakh to the MSEs, at a fixed interest rate of 5%. This is only for those MSEs which are engaged in manufacturing medical supplies meant for fighting the coronavirus.
Sidbi is calling this concessional scheme the Sidbi Assistance to Facilitate Emergency (SAFE) and the maximum tenure of these loans will be five years. Some of the products identified by Sidbi are hand sanitisers, masks, gloves, head gear, body suits, shoe-covers, ventilators and goggles. Obviously, to qualify for this loan at the concessional rate of interest, the unit has to fall under the definition of a micro or small enterprise as per the norms. Sidbi has said testing labs are also eligible for loans under this scheme.
Sidbi Chairman has put out a statement saying looking at the dire situation the country is passing through, the bank felt being a dedicated institution to support the small-scale units in the country, it had to do something. It then came up with this idea. If this can take-off quickly it would offer twin benefits; one of giving a lifeline to many MSEs which are at the unenviable crossroads of having to shut down their operations and the other is to make its own contribution in fighting the coronavirus menace.
The option to choose the companies engaged in the making of these medical supplies is also judicious, since these are the only ones exempted from the lockdown and they will desperately need these funds.
The special scheme will cover funds needed to acquire equipment, plant and machinery and raw materials required for production or delivery of services. The loans offered are collateral-free and will be sanctioned within 48 hours of applying and submission of documents.
MSEs can apply online for availing loans under the scheme, Sidbi has stated.