MSME Loans from IDBI Bank

A summary of IDBI Bank small business loan schemes

Industrial Development Bank of India, popularly known as IDBI Bank, was established in 1964 as a subsidiary of RBI. With over 1,800 branches, it was one of the fast-growing public sector banks in India. However, it was re-categorised as a private sector bank for regulatory purposes by RBI in 2019. The bank offers a wide range of banking services including consumer banking, commercial banking, investment banking, asset management, pensions and credit cards.

As of October 2020 beginning, its website shows that IDBI Bank offers at least 7 small business loans to its customers.

Let’s take a quick look at them one by one.

SME Loan Against Property

IDBI Bank offers financial assistance to MSME businesses against commercial and residential properties. Small businesses can use the funds obtained for all business purposes in the short and long term. The maximum loan amount offered by the bank under this loan scheme is Rs. 5 crore. The term loan must be repaid within 7 years. If the business avails this loan for their working capital needs, the loan must be repaid within 12 months.

Industry-specific MSME Loans

IDBI Bank offers MSME loans that are targeted towards small businesses in specific industry sectors. They include:

• MSME Loan for Wholesale and Retail Traders, Dealers and Distributors: This loan is targeted towards wholesale and retail traders, dealers and distributors in the MSME sector. They can avail this loan to meet their financial needs for day-to-day business operations as well as business expansion needs. The maximum loan amount sanctioned by the bank under this loan scheme is Rs. 5 crore

• MSME Loan for Small Road and Water Transport Operators: Small Road and Water Transport Operators in the MSME sector can avail of this loan to purchase new commercial vehicles such as auto-rickshaws, taxi-cars, trucks, small boats, small refrigerated vans and bulk carriers for carrying petroleum or edible oil. The bank extends a maximum of Rs. 2 crore under this scheme

• Finance to Doctors and Medical Practitioners: Qualified doctors and medical practitioners from different branches of medicine such as Allopathy, Homeopathy, Unani and Ayurveda who want to set up a clinic, nursing home, hospital or pathology labs, or to purchase equipment, ambulance, etc. can apply for this loan scheme. The maximum loan amount offered by the bank is Rs. 2 crore

• Vendor Finance Programme: Manufacturers and suppliers in the MSME sector can avail the vendor finance scheme offered by IDBI Bank to meet their working capital and capital expenditure needs

Stand-up India Loan

Women and individuals from the Scheduled Caste (SC)/Scheduled Tribe (ST) can avail of the Stand-up India loan scheme to set up a new greenfield enterprise in manufacturing, services or trade sectors. Even non-individual enterprises where at least 51% of the company stake is held by women or people in the SC/ST category are eligible for this loan. The maximum loan amount sanctioned by IDBI Bank under this loan scheme is Rs. 1 crore.

Mudra Loan

Small business in the non-corporate small business segment such as fruit vendors, repair shops, truck operators and small manufacturing units can get funds for their business needs under the Pradhan Mantri Mudra Yojana (PMMY). The loan is divided into three sub-categories based on the type and size of business namely, Shishu loan, Kishore loan and Tarun loan. The loan amount sanctioned by the bank depends on the loan variant (Shishu / Kishore / Tarun) applicable to the business.

A Final Word

Now you know about the types of small business loans offered by IDBI Bank. Please check out our MSME loans section, if you are interested in learning about MSME loans offered by other Indian banks. It will help you know the different options available so that you can find a loan scheme that is best suited for your business venture.