SBI term-loan to franchisees

State Bank of India is offering term loans to franchisees of Apollo Hospitals to set up the clinic model across the country.

Signing a Memodrandum of Understanding (MoU) today between SBI and Apollo Hospitals, Ratan Jalan, CEO Apollo Health and Lifestyle Ltd (AHLL) told Business Standard that the loans would be offered at "an extremely attractive rate of 8.5 per cent".

"This is against interest rates of 10.5-11 per cent already availed by some of our existing franchisees," he added.

While Apollo Hospital does not stand as guarantor to these term loans, the fact that these entrepreneurs are piggy-backing on an established organisation, SBI is able to offer lower rates of interest, said SBI sources.

The pact was signed today between Jalan and J Chandrasekaran, general manager, SME business, SBI.

Apollo Hospitals expects to set up over 200 clinics in addition to the existing 34 franchisee clinics. With each calling for an investment of about Rs 1.7-2 crore, and SBI offering to fund over 65 per cent of the project cost, as well as 75 per cent of the working capital requirement, SBI expects to sizeable business through this MoU.

In addition, as Apollo is also looking at foraying overseas, franchisees there could also avail of term loans from SBI, said Jalan.