FISME plans collateral-free MSME lending platform

A memorandum of understanding in this regard was signed by Prashant Patel, president of FISME, and Vikash Khandelwal, CEO of Eqaro, in Delhi recently.

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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 said.

According to Patel, it is like an overdraft facility, initially pegged at Rs 25 lakh, which could be tapped anytime from anywhere should an MSME need funds.

Former Secretary, Department of Financial Services, DK Mittal termed the initiative “path-breaking”, adding, “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.”