State Bank of India (SBI) has introduced ‘SME Digital Business Loans,’ promising an end-to-end sanction turnaround time of up to 45 minutes for SMEs.
This new loan offering leverages advanced technology and a network of APIs (application programming interfaces) to streamline the lending process. Using authentic data footprints from sources such as income tax returns (ITR), goods and services tax (GST) returns, and bank statements, SBI has developed a data-driven credit assessment engine.
This engine can deliver sanction decisions within an impressive 10 seconds after the required details are submitted, entirely without human intervention, the bank stated.
“The proposition eliminates the need for traditional credit underwriting and lengthy appraisal processes,” SBI explained. “For loans up to ₹50 lakhs, SBI has waived the requirement for financial statements, relying instead on transaction history and GST returns for appraisal.”
The new loan service will be available through all of SBI’s channels, including its website, branches, SME Centres, and internet platforms. In the coming months, SBI will expand access to this product across all its customer service point (CSP) partner locations and via QR codes at outdoor touchpoints.
Dinesh Kumar Khara, Chairman of SBI, said, “We have seamlessly integrated innovation with our customer-centric approach to revolutionize the MSME (micro, small, and medium enterprises) lending landscape, reducing human intervention and enhancing the ease of doing business.
“This is particularly beneficial for a segment previously characterized by high costs and manual processes.
“By leveraging the rich data footprint of MSME units in the ecosystem, we aim to provide the fastest and most intuitive lending process, further solidifying our position as the leading MSME lender in the country.”
The bank recorded a 20% year-on-year credit growth in the SME segment, with outstanding credit to SME borrowers exceeding ₹4 lakh crore as of March-end 2024.
SBI has identified MSME advances as a focal point for its growth and profitability over the next five years.
Vinay Tonse, Managing Director (Retail Banking & Operations) at SBI, noted that with the launch of SME Digital Business Loans, the bank offers a unique proposition to both new and existing MSME clients, ensuring in-principle sanction within 45 minutes, ultimately empowering SMEs to thrive in today’s dynamic business landscape.
Additionally, SBI has digitized the Mudra loan product, which offers loans to micro-units with requirements up to ₹10 lakh, and has automated the collateral-free process for loans under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) cover.
