SBI launches SME Assist to solve MSMEs' liquidity crunch

State Bank of India (SBI), the country's largest lender, has launched a first-of-its-kind product ‘SME Assist’ wherein the bank will provide a short term working capital demand loan (WCDL) to its micro, small and medium enterprise (MSME) customers for nine months.
Under ‘SME Assist’, the  bank will provide loans to MSME entrepreneurs on their Input Credit Claims under the Goods and Service Tax (GST) at a concessional rate of interest.
Mr. V. Ramling, CGM (SME), SBI said the product would help MSMEs to manage their working capital requirement till the time they get input credit. It also supports the government’s GST initiative, as it will help stabilize the SMEs to run their operations without any hurdle.
WCDL will be sanctioned outside Assessed Bank Finance (ABF) at 20% of the existing fund based working capital limit or 80% of input tax claim due on purchases, whichever is lower. With a processing fee of Rs.2000, MSMEs can avail WCDL to meet their working capital requirement. Companies applying for a loan under the product have to provide a certificate from their chartered accountant confirming the input credit claims, a press release from the bank said.
Also under SME Assist, SME borrowers can enjoy a moratorium period for the first three months. The ad hoc amount can be repaid either in one bullet payment or in six EMIs in next six months after moratorium period is over. Simple documentation is proposed and the SME customers of the bank can avail SME Assist facility till March 31, 2018, the release added.


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