Latest data released by the finance ministry on Sunday showed sanctions of over Rs 17,700 crore under the backstop lending facility to offset the impact of the coronavirus pandemic on small businesses, with disbursements of Rs 8,320 crore. Of this, almost two-thirds of the sanctions are by SBI. “Not everyone will immediately disburse the loan but will keep the option ready,” said a government officer.
Besides, there are certain category of exporters who are able to get loans at lower rates than the 7.5% being offered by some of the public sector banks, while private players are charging close to the ceiling of 9.25%.
While businesses are also taking time to seek the additional loan facility as demand remains low and the supply chain is not fully operational, for small businesses a pet peeve is the paperwork that varies from one bank branch to another. “It depends on the manager. We requested the government to standardise it,” said Animesh Saxena, president of The Federation of Indian Micro and Small & Medium Enterprises (FISME).
Several small business owners and consultants said that some of the lenders such as Canara Bank were demanding balance sheets for the 2019-20 financial year and other documents.