SIDBI launches new loan scheme for SC/ST entrepreneurs, with focus on Punjab

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With the sole aim to support Scheduled Caste/Scheduled Tribe entrepreneurs of the country, the Small Industries Development Bank of India (SIDBI) formally launched ‘Saath’, a new financial scheme, at Hoshiarpur on Wednesday.

The scheme was launched by National Commission for Scheduled Castes (NCSC) chairman Vijay Sampla and SIDBI chairman and managing director Sivasubramanian Ramann.

During the event, the loan sanction letters were also issued to the beneficiaries of the scheme. “The Narendra Modi-led central government had asked banks to come up with loan schemes for SC/ST people.

Considering my request, SIDBI came forward with one such initiative to help SC/ST people flourish their businesses. The ‘Saath’ scheme has minimal processing fee. People can repay the loan amount in seven years, which is often five years in other banks’ schemes,” Sampla said.

The SC entrepreneurs from across the country can take benefit of the scheme, he added.

“I am thankful to SIDBI for considering my request of keeping special focus on assisting the Micro, Small and Medium Enterprises (MSMEs) based out of Hoshiarpur (Hoshiarpur district) and Phagwara (Kapurthala district), he said. “Besides ‘Saath’, the bank also has another scheme – ‘Paryas’ – in which the bank provides loans of small amounts to the SC/ST people to start or expand their businesses,” Sampla added.

Ramann said, “The businesses of many people got affected in Covid pandemic and with the ‘Saath’ scheme, people can again think of expanding their industries. Under the scheme, SC/ST entrepreneurs can avail of the benefit of term loan assistance (on relatively easy terms) for establishing new or greenfield units or for expanding and modernising the existing units, coupled with incentive structure.

The term loan assistance will be provided to such units for acquisition of land, construction of factory or office building, equipment, plant and machinery and other fixed assets.” Each borrower can take a loan from Rs 25 lakh up to Rs 3 crore, while they will have to repay the amount within seven years (including the moratorium period of up to two years). The loans extended under the scheme cannot be used for repayment of earlier loans, he added.

Ramann said that priority would be given to those units of SC/ST entrepreneurs who have already received funds under the ‘Stand-up India’ scheme of the Centre. Also, the entrepreneur should contribute a minimum of 20% of the project cost in the existing unit whereas those establishing new units will have to contribute a minimum of 25% of the project cost.

SC/ST entrepreneurs who are eligible but are not in a position to provide collateral security will get credit guarantee coverage under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). Also, 50% cost of the processing fee for CGTMSE guarantee will be borne by SIDBI.