Please
refer to SMEFD Circular No. 17 dated November 2, 2009
circulated therewith the Scheme for Refinancing Facility
for Modernization of Small and Medium Enterprises (SMEs),
and SMEFD circular No. 14 dated September 4, 2009.
2.
As you know, the SMEs play an important role in creation
of employment opportunities, economic growth, poverty
reduction and equitable distribution of economic prosperity.
However, despite the overwhelming economic significance,
SMEs have not been able to avail adequate financing
facilities from the formal sources. In this regard,
fixed investment financing of SMEs is of particular
concern as it constitutes a small proportion of total
SME Financing. In order to improve the access to finance
for SMEs, State Bank has decided to expand the scope
of its subject Schemes to cover a wide range of SME
Clusters/Sectors. The financing shall be available for
purchase of new imported/local Plant & Machinery
for BMR of existing and setting up of new units. An
illustrative list of SME sectors is attached.
3.
In addition, financing for import/ local purchase of
new generators up-to a maximum capacity of 500 KVA shall
also be eligible under the Scheme. The capacity of generator
shall, however, not be in excess of SME Unit’s
in-house energy requirements or up-to 500 KVA, whichever
is less.
4. Maximum period of financing has been enhanced from
7 years to 10 years.
5. In order to further incentivize the banks/DFIs to
provide financing facilities under the Scheme their
spread has been enhanced. However, end users rate would
remain the same. The revised rates under the Scheme
shall be as under:
|
Rate
of Refinance |
Banks’/DFIs’
Spread |
End
User’s Rate |
| Up-to
3 years |
5.50% |
2.50% |
8.00% |
| Over
3 years and up-to 5 years |
6.25% |
2.75% |
9.00% |
| Over
5 years and up-to 10 years |
7.00% |
3.00% |
10.00% |
6.
The scheme will remain effective up to December 31,
2012.
7.
Other terms and conditions of the Scheme shall remain
unchanged.
Encl:
As above