Sbi Smile Scheme - Interest Free Loan

The SBI Interest Free Loan as Equity scheme or SBI SMILE envisages grant of interest free loan as equity repayable over a long period to eligible professional and technically qualified entrepreneurs setting up new MSME businesses. State Bank of India is India's largest public sector banking and financial services company with over 14000 branches, including 191 foreign offices spread across 36 countries. State Bank of India is a pioneer in SME financing in India. As a bank, it has been playing a critical role in the overall growth and development of the SME sector. The Bank has developed a wide array of products and services in order to cater to the evolving needs of the SME sector. It has over 1.3 million SME loan accounts with total exposure of Rs 1.63 lakh crore as on March 2012. Under Micro and Small Enterprises segment, the Bank has extended credit facilities to the tune of Rs 78,170 Cr as on December 2011 which contributed 52% of its total SME advances.

Eligibility Criteria

To be eligible for the SBI interest free loan or SMILE scheme, the following conditions must be satisfied:

Entrepreneurs must be setting up a new business.
The entrepreneur must have a professional qualification or technically qualified person like doctor, engineer, management graduate, etc.,
The scheme provides equity assistance only to those entrepreneurs genuinely not able to meet the necessary margin requirements from their own resources.
The business being setup must be a MSME business.
The total cost of the project must be more than Rs.10 lakhs.

Amount of Assistance

Under the scheme, assistance is provided as the difference between the applicable margin and the capital contributed by the entrepreneur. Equity assistance of upto Rs.10 lakhs for MSME industries and Rs.5 lakhs for professionals and self-employed persons can be granted subject to a minimum of Rs.1 lakh for industries and Rs.50 thousands for professionals.

The entrepreneur is required to contribute a minimum of 15% of the margin required and the capital contribution of the entrepreneur should not be less than 50% of the margin.

Repayment

Funds lent under the SBI SMILE scheme will not have any interest. The loan can be repaid over a period of 3 years after an initial moratorium period of 5 to 7 years (during which other term loan are repaid). Application loan under the Sbi Smile Scheme can be made to the nearest State Bank of India branch.

Download Sbi Smile Scheme Application Form

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Frequently Asked Questions

Common questions about SBI SMILE Scheme.

The SBI SMILE Scheme is an initiative by State Bank of India that provides interest-free loans as equity to eligible professional and technically qualified entrepreneurs setting up new MSME businesses. It aims to assist entrepreneurs who are unable to meet the necessary margin requirements from their own resources.

To be eligible for the SBI SMILE Scheme, the entrepreneur must be setting up a new business, have a professional qualification or technical qualification like a doctor, engineer, or management graduate. Additionally, the business being set up must be an MSME business, and the total cost of the project must be more than Rs. 10 lakhs.

Under the SBI SMILE Scheme, equity assistance of up to Rs. 10 lakhs for MSME industries and Rs. 5 lakhs for professionals and self-employed persons can be granted, subject to a minimum of Rs. 1 lakh for industries and Rs. 50 thousand for professionals.

The entrepreneur is required to contribute a minimum of 15% of the margin required, and their capital contribution should not be less than 50% of the margin.

The loan provided under the SBI SMILE Scheme is interest-free and can be repaid over a period of 3 years after an initial moratorium period of 5 to 7 years, during which other term loans are repaid.

Applications for the SBI SMILE Scheme can be made at the nearest State Bank of India branch.

Yes, the SBI SMILE Scheme is specifically designed for entrepreneurs setting up new MSME businesses. Existing businesses are not eligible for this scheme.

No, the SBI SMILE Scheme is specifically for MSME businesses. Businesses that do not fall under the MSME category are not eligible for this scheme.

The moratorium period of 5 to 7 years in the SBI SMILE Scheme is designed to provide entrepreneurs with a grace period to establish their business and generate sufficient cash flows before starting the repayment of the interest-free loan.

Yes, the SBI SMILE Scheme is available at all State Bank of India branches across the country, as SBI is a pioneer in SME financing and has a widespread network of branches.