Scheme Overview
The PSB 59-minute loan scheme is a government initiative launched in November 2018 to provide quick and easy credit access to micro, small and medium enterprises (MSMEs). The scheme offers in-principle bank approval for collateral-free term loans or working capital loans for MSMEs from Rs 10 lakh to Rs 5 crore under the government’s Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) programme. The scheme also facilitates Mudra loans for MSMEs to meet their various business needs.
Scheme Performance
According to the MSME Ministry data, the scheme has sanctioned 2.48 lakh loans involving Rs 84,963 crore till January 1, 2024, of which 2.29 lakh loans amounting to Rs 68,593 crore were disbursed. This amounts to 3.39 per cent of the total bank credit of Rs 20.20 lakh crore deployed to MSMEs under priority sector credit in May 2023. The scheme has seen a significant enhancement in July 2019, when the credit limit was raised from Rs 1 crore to Rs 5 crore.
Scheme Benefits
The scheme aims to provide hassle-free and timely credit support to MSMEs, which are often faced with challenges such as lack of collateral, high interest rates and complex documentation. The scheme enables MSMEs to apply for loans online through a portal (www.psbloansin59minutes.com) and get an in-principle approval within 59 minutes. The scheme also reduces the turnaround time for loan sanctioning and disbursal by leveraging technology and data analytics. The scheme helps MSMEs to acquire new plant and machinery, upgrade technology, expand products, purchase raw materials and develop infrastructure, among others.