SIDBI Assistance to Facilitate Emergency Response against Corona Virus (SAFE Scheme)

SIDBI Assistance to Facilitate Emergency Response against Corona Virus (SAFE Scheme)

Stepping up the fight against COVID -19 and helping Micro and Small Enterprises (MSEs) battle the prevailing situation, Small Industries Development Bank of India has launched SIDBI Assistance to Facilitate Emergency Response against Corona Virus – SAFE Scheme. As part of this financial scheme, assistance is provided for MSEs which are involved in the manufacturing of medical products or services related to COVID-19.

The main objective of the scheme is to support and encourage those MSEs which are helping the nation fight against the novel Corona Virus. SIDBI provides loans to MSEs at a low rate of interest of 5% within 48 hours and thereby making it easier for them to facilitate tasks that can help tackle the pandemic.

Aim of the SAFE scheme

As mentioned above, the key objective of the SAFE scheme is to provide financial support to MSEs which are evolved in the manufacturing of products related to fight against the novel Coronavirus. The SIDBI also aims to provide loan to MSEs which are providing services related to COVID-19.

Purpose of Loan under SAFE scheme

Small Industries Development Bank of India is providing the loan for the following purposes:

  • The MSE unit can use the loan avail under the SAFE scheme is to purchase any equipment or assets for manufacturing or delivery of services
  • The loan can also be used for the purchase of raw material or consumables for the production of items that are used for the fight against COVID-19.

Eligible Entity of SAFE scheme

SIDBI Assistance to Facilitate Emergency Response against Corona Virus (SAFE Scheme) is applicable for all existing MSEs that manufacturing the following products. The assistance provided for SIDBI’s existing customers and new SIDBI customers.

  • MSEs engaged in the manufacturing of hand sanitizers, headgear, bodysuits, Permitted drugs, Ventilators, N95 or higher Masks, Eye protection (visor/goggles).
  • MSEs Manufacturing the Protective Gowns / Aprons, Shoe covers, IV Fluid – DNS, IV Fluid – Dextrose, IV Sets, IV Cannula
  • The MSEs engaged in the production of ICU Beds, Cardiac monitors, Syringe pumps, Portable x-ray machines, Endotracheal tube, Suction tube, Oxygen cylinders, Rubber Sheets, testing labs, etc

SAFE scheme Loan Details

SIDBI is providing Rs. 50 lakh for eligible entities under the SIDBI Assistance to Facilitate Emergency Response against Corona Virus (SAFE Scheme). This scheme offers loans either in the form of the Term Loan or Working Capital Term

  • Term Loan is provided for acquiring equipment/machinery
  • Working Capital Term Loan can be availed for purchasing the raw materials

The validity of the SAFE Scheme

Withdrawal under the s SIDBI Assistance to Facilitate Emergency Response against Corona Virus (SAFE Scheme) will be valid till September 30, 2020

Key Features of the SAFE Scheme

The key feature of the SIDBI Assistance to Facilitate Emergency Response against Corona Virus (SAFE Scheme) is as follows:

  • It is one of a quick delivery product of SIDBI; loan under the scheme will sanction within 2 days.
  • SIDBI provides Upto 100% finance subject to Asset Coverage of 1.1 for existing SME customers and 1.2 for new SMEs
  • For Working Capital Term Loan 25% margin it will be converted into cash collateral. No separate collateral required for this scheme.
  • Cost of credit guarantee cover is borne by Small Industries Development Bank of India
  • The eligible enterprises are not required to pay any processing fee for avail the loan
  • Prepayment charges are also not applicable for the scheme

Rate of Interest

The SIDBI has fixed the rates of Interest for 5% per annum on reducing balance.

Security Details

For Existing customers: SIDBI will extend the existing securities or any other security to meet asset coverage

For New customers: Credit guarantee cover will be offered at no cost or any other security offered by borrower to meet asset coverage norms

Repayment Details

The maximum repayment period for the term is 5 years including a 1-year moratorium and Working Capital Term Loan that need to be repaid within 18 months including a suitable moratorium.

Documentation for SAFE Scheme

SIDBI offers a simple one-page application and built-in checklist for SIDBI Assistance to Facilitate Emergency Response against Corona Virus (SAFE Scheme). The Standard KYC checks and due diligence are also available for the SAFE application.

SAFE Scheme Application

The eligible MSME needs to access the SIDBI’s online application page to apply the scheme. The online Registration Login page will display, by clicking on the Registration tab, a new user can register in SIDBI and avail the loan.

SAFE Scheme - Login Page
SAFE Scheme – Login Page

The applicant entity needs to provide the details of Enterprise Name, Phone number, Email, and Proposed Total Loan Requirement. On successful registration, the user name and password will be provided to the entity.

SAFE Scheme -Registration Page
SAFE Scheme -Registration Page

After login to the portal, the applicant needs to fill a simple one-page application and built-in checklist. After the Standard KYC checks and due diligence, the loan amount will be credited to the applicant’s account within 48 hours.

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Post by Renu Suresh

Renu is experience content writer specialised in compliances and company rules.