Context

• Finance Ministry launches web portal (psbloansin59.com) that will enable in principle approval for MSME loans up to Rupees 1 crore within 59 minutes.
• It will be first of its kind web portal in MSME credit sector which brings in advanced financial technology to ensure seamless loan approval and management.

About

• The loans will be undertaken without human intervention till sanction & disbursement stage.
• It would provide a user friendly paperless platform where MSME borrower is not required to submit any physical document for in-principle approval.
• The platform will use algorithms to read and analyse data points from various sources such as IT returns, GST data, bank statements, etc. in less than an hour. At the same time the platform will capture the applicant’s basic details using smart analytics from available documents.
• The system simplifies the decision making process for a loan officer as the final output provides a summary of credit, valuation and verification on a user-friendly dashboard in real time.

Key features of the platform:

• Majority stake of SIDBI & big 5 PSBs- SBI, Bank of Baroda, PNB, Vijaya and Indian Bank.
• A first for MSME borrowers-Connects with multiple banks without visiting the branch.
• Advanced Digital Platform for MSME Financing with Services Driven Architecture and highest level of Information Security.
• Only Platform in the market with a Banker Interface which covers the Branch Level integrations (with maker-checker-approver) in tune with current systems of PSBs.
• Only Platform that enables Bankers to create Loan Products in line with the Scoring models & assessment methods within their approved credit policy.
• Only Platform that has an integrated GST, ITR, Bank Statement Analyzer, Fraud Check and Bureau Check as well as host of other features which at present is not available with any other player in the market.
• Only Platform that has been integrated with CGTMSE for checking the eligibility of Borrowers. MSME borrower gets loan up to Rs.2 crore without any collateral, which is major relief for MSME borrower.

Significance

• The platform will reduce the turnaround time of loan processing from 20-25 days to 59 minutes, which means the final disbursement of loans would happen in 7-8 days.
• The platform would bring transparency in approval of loans, preventing fraud and forgery.
• It will provide holistic information to the creditor bank regarding the applicant’s credit summary; valuation and verification thus help them in decision making.
• The portal will boost investment in the economy by providing a single window for approval of loans to MSMEs.

 

Downside:

• Presently, the portal is for securing loan approvals only from Small Industries Development Bank of India, and five public sector banks (PSB) — State Bank of India (SBI), Bank of Baroda, Punjab National Bank, Vijaya Bank, and Indian Bank. Some of the important Public Sectors Banks such Punjab National Bank is out of its ambit.