Finance Ministry mulls raising cap on 59-minute loans to Rs 3-5 crore

The Finance Ministry is planning to raise the Rs 1 crore cap for the 59-minute loan scheme to Rs 3-5 crore.

"Discussions regarding this are on. The cap will be increased gradually," a senior finance ministry official said.

The 59-minute scheme, part of Prime Minister Narendra Modi's 12-point action plan for MSMEs, was announced in November 2018.

Extending hassle-free loans to such units which are without any collateral has been a hit on www.psbloansin59minutes.com, which is a strategic initiative of the SIBDI-led public-sector bank consortium incubated under the Department of Financial Services.

Banks are witnessing a jump in credit to micro and small businesses through the online platform psbloansin59minutes.com, which basically deals with small credit limit loans.

The government has been putting a lot of stress on loans to the micro units. Another variant of such loans - Mudra - is also a key constituent of the Finance Ministry's financial inclusion programme, as these small entrepreneurial activities push employment and income in the lower income groups.