FISME plans collateral-free MSME lending platform

Aimed at fulfilling the necessity for pressing funds, a digital lending platform is being created to supply entry to collateral-free capital as much as Rs  25 lakh to micro, small and medium enterprises (MSMEs).

The platform is being arrange by the Federation of Indian Micro and Small & Medium Enterprises (FISME) and Eqaro Surety Pvt Ltd, a supplier of monetary ensures.

A memorandum of understanding on this regard was signed by Prashant Patel, president of FISME, and Vikash Khandelwal, CEO of Eqaro, in Delhi not too long ago.

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“Lending has traditionally been collateral based. This unique, first time in India initiative will help MSMEs get easier access to credit backed by a surety guarantee without the need to put up collaterals,” Khandelwal stated.

According to Patel, it’s like an overdraft facility, initially pegged at Rs 25 lakh, which could possibly be tapped anytime from wherever ought to an MSME want funds.

Former Secretary, Department of Financial Services, DK Mittal termed the initiative “path-breaking”, including, “Lack of collateral is the single biggest bottleneck that small entrepreneurs face in accessing institutional funds and obviating the need for asset-based collateral by sureties can revolutionise MSME lending.”