Many MSMEs are approaching banks for collateral-free loans: Survey

The rating agency said the survey was conducted over 2 weeks - between June 23 July 7 - and saw the participation of 345 respondents from a cross-section of sectors

Large number of businessmen in the MSME sector have approached banks for collateral-free loans to tide over the crisis following coronavirus outbreak, a Care Ratings survey said.

According to the survey, nearly 70 per cent of the respondents have approached banks for collateral free and government guaranteed loans, and the majority of them intend to borrow less than Rs 1 crore.

It further revealed that banks have so far sanctioned loans to around one-third of the applicants and the cost of borrowings is 8-9 per cent for most of the borrowers.

The rating agency said the survey was conducted over 2 weeks -