The coronavirus pandemic in India has thrown hundreds and thousands of people out of work, various sectors are devastated, the government is struggling to maintain a delicate balance between keeping the countrymen safe and making sure that they can still make a living or even have enough to eat. In such a scenario, the financial repercussions are intense, especially for the MSMEs.
After the tourism industry, micro, small and medium enterprises (MSMEs) sector has suffered the most.
With an aim to support the MSME sector in their liquidity crisis, country’s largest lender State Bank of India has set a target of disbursing Rs 700 crore to MSMEs in the Mumbai circle by the end of June.
Among all banks, SBI controls a market share of 22 per cent in the MSME lending.
“SBI will boost the flow of credit to MSMEs (micro, small and medium enterprises) in this challenging period by reassessing their working capital limit and also by extending COVID-19 emergency loans.
“Overall, we expect to lend Rs 700 crore to MSMEs in four districts of Mumbai circle – Mumbai, Thane, Palghar and Raigad by the end of June,” the World Trade Centre said in a statement quoting Suresh Nair, deputy general manager (SMEs and financial inclusion) at SBI, as saying after a webinar.
Nair expressed hope that the pandemic will not lead to a sudden spurt in bad loans as the Reserve Bank of India has provided a moratorium on all loan repayments.
“The impact of the crisis on NPAs (non-performing assets) will become clear after August depending on the evolving situation,” Nair said.
Though SBI has provided sanction letter for an additional loan facility to 67 per cent of all eligible borrowers, only 50 per cent of them could avail of the facility due to practical difficulties in executing documentation, he said.