SBI launches new scheme to encourage SMEs
State Bank Of India (SBI) Has Launched A New Scheme, SBI Smile which will provide interest-free seed capital of up to Rs.10 lakh to budding entrepreneurs. The scheme is specially targeted to encourage small and medium enterprises and will be in place initially for one year, after which the bank could extend it, depending on the situation. Currently, banks give loans to the entrepreneurs only if they have a substantial capital to invest. The loan amount is around 70-80 percent of the total project cost. Under the new scheme, SBI will provide the seed capital and entrepreneur will also be able to seek a loan. Loan terms & interest rates will be determined as per the existing guidelines. The bank will offer a five-year moratorium on paying the seed capital amount. The bank, however, has not set any target for the amount it will expend under the scheme.