FISME plans collateral-free MSME lending platform
Aiming to meet the need for urgent funds, a digital lending platform is being established to provide access to unsecured capital of up to Rs 25 lakh to micro, small and medium-sized enterprises (MSMEs).
The platform is set up by the Federation of Indian Micro, Small and Medium Enterprises (FISME) and Eqaro Surety Pvt Ltd, a provider of financial guarantees.
A Memorandum of Understanding in this regard was signed recently in Delhi by Prashant Patel, Chairman of FISME, and Vikash Khandelwal, CEO of Eqaro.
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“Loans are traditionally based on collateral. This unique initiative, for the first time in India, will help MSMEs to more easily access credit backed by a surety bond without having to provide collateral,” said Khandelwal.
According to Patel, it is like an overdraft facility, initially pegged at Rs 25 lakh, which could be tapped anytime from anywhere should an MSME need funds.
Former Secretary of the Department of Financial Services, DK Mittal, called the initiative “revolutionary”, adding: “Lack of collateral is the biggest bottleneck that small entrepreneurs face in accessing institutional funds and avoid the need for asset-based guarantees by sureties. revolutionize lending to MSMEs.