The country’s largest lender, State Bank of India, cut lending rates on loans for small and medium enterprises and announced measures to improve credit flow to the fund-starved sector.
SBI has reduced lending rates for new SME loans up to Rs 5 lakh to eight per cent and that for loans of Rs 5-25 lakh to 10 per cent.
SBI used to offer SME loans up to Rs 5 lakh for 8.5-10.5 per cent and loans of Rs 5-25 lakh for 9-11 per cent.
For 2 years
Under the â€˜SME Helpâ€™ scheme, existing customers can get term loans for a period of two years at 8 per cent interest.
The bank has also reduced the interest rate on working capital as well as term loans (provided they are covered by Credit Guarantee Fund Trust for Micro and Small Enterprisesâ€™ guarantee) for all new SME customers with loan requirements up to Rs 5 lakhs to 8 per cent. Currently, depending on an SMEâ€™s credit rating, the bank charges an interest rate of anywhere between 8.5-10 per cent.
Further, for new SMEs with fund based loan requirements above Rs 5 lakhs but below Rs 25 lakhs, the bank is offering fixed rate of interest of 10 per cent. Currently, depending on an SMEâ€™s credit rating, the bank charges an interest rate of anywhere between 10 -11.5 per cent.
Both these interest concessions, the bank said, will be available for the next two years and will be available to those who obtain CGTMSE cover.