Exemption from requirement of financial statement for SME loans of less than Rs.50 lakh

SBI, State Bank of India
Photo credit: Ruby Sharma

Abhijit Lele Mumbai

The country’s largest lender, State Bank of India (SBI) has launched ‘SME Digital Business Loan’ with the aim of approving loans in 45 minutes.

SBI has identified the micro, small and medium enterprise (MSME) line of business as the focal point for the bank’s growth and profitability over the next five years.

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“This innovative product marks a significant leap forward in digitization by offering SMEs a timed digital loan journey with an end-to-end approval of up to 45 minutes,” SBI said in a statement.

The proposal eliminates the need for traditional credit underwriting and lengthy appraisal processes, ushering in a new era of simplicity, speed and accessibility in MSME lending.

Specifically, for loans up to Rs 50 lakh, SBI has waived the requirement of financial statements, relying on GST returns for transaction history and valuation.

Using authentic data footprints from sources such as Income Tax Returns (ITRs), GST returns, and bank statements, SBI has developed a data-driven credit assessment engine that, after submitting the required details Capable of providing approval decisions within a remarkable 10 seconds, without a hitch. Human intervention, the statement said.

Dinesh Khara, Chairman, SBI said, “We are committed to setting a new industry benchmark with SME Digital Business Loans, and emphasize our continued efforts to bring innovation to MSME lending.”

Khara said, ‚ÄúLeveraging the rich data footprint of MSME units in the ecosystem, we aim to provide the fastest and most intuitive lending process, positioning us as the leading MSME lender in the country. But to further consolidate our position,” Khara said.

SBI’s outstanding SME book has increased from Rs 2.67 trillion at the end of March 2020 to Rs 4.33 trillion at the end of March 2024. The asset quality of the book has also improved, with gross non-performing assets down from 9.43 percent in March. 3.75 percent from 2020 to March 2024.

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