The second wave of COVID 19 is having a detrimental effect on the entire healthcare system of our country. The existing healthcare infrastructure is not good enough  to cater to the needs of the COVID patients dying due to the lack of proper oxygen supplies and essential medicines which are, presently utmost important to save lives of many Indians who are running like a headless chicken, affected by the second wave of Corona.

Additionally many businesses, have again started struggling to continue and suffering due to continuous lockdown and restriction on the movement of goods and people from one place to another.

To fight the sudden upsurge in the COVID cases and to provide opportunities for the Healthcare MSMEs, the Central government has taken a positive step. In this line, the Small Industries Development Bank of India (SIDBI) has launched two new MSME loan schemes for MSMEs called SHWAS and AROG.

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What are SHWAS and AROG loan schemes?

The scheme has been launched by the Small Industries Development Bank of India (SIDBI) to provide financial assistance for MSMEs to deal with Corona. SHWAS and AROG are two different loan schemes. In both these schemes, MSMEs get a business loan. This plan is being explained in detail.

Information about SHWAS & AROG loan scheme

  • The scheme has been prepared under the guidance of the Government of India, which facilitates funding for production and services related to the supply of oxygen cylinders, oxygen concentrators, liquid oxygen, oximeters, and essential medicines.
  • To help micro, small and medium enterprises (MSMEs) with necessary financial support, SIDBI recommends providing subsidized business loans for the supply of products used in the fight against the COVID-19 epidemic.
  • SIDBI, the premier financial institution engaged in the promotion, financing, and development of MSMEs launched the SHWAS to the healthcare sector in the war against the second wave of COVID19 and Launched AROG for recovery and organic growth of the MSMEs from the aftermath of COVID19
  • In view of the current problems caused by COVID 19, National Health Emergency has set out to carry out these plans to assist healthcare providers to fight the epidemic.

Eligibility for SHWAS & AROG loan scheme

  • Cash benefit in the last audited balance sheet for existing customers of SIDBI (ie to be in business profit in FY 2020)
  • Business should be in cash profit in last two years for new customer in SIDBI.
  • Must have a satisfactory credit track record with an existing banker / Financial Institutions.
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Documents required for SHWAS & AROG loan scheme

  • Simple documents such as an Aadhar card, PAN card, bank statement, copy of ITR, etc.
  • Purchase invoice to make direct payment to the supplier for purchase of equipment/machinery/MFA and raw materials.

How much loan will be available under SHWAS & AROG loan scheme?

  • Under this scheme, a provision has been made to provide a business loan of up to 2 crore rupees to eligible MSMEs.
  • The special feature of these schemes is that, if eligible, and if the MSMEs provide all the necessary documents along with the application, then they can get a business loan within 45 hours. An attractive interest rate of 4.5 percent per annum is applicable on loans available under these schemes. Along with this, a provision has been made to give a 100 percent loan on the project.

Loan tenure in SHWAS & AROG loan scheme

  • Repayment period Term Loan – Up to 60 months
  • Working Capital Term Loan – Up to 18 months
  • Moratorium up to 12 months included.

How to apply for SHWAS & AROG loan scheme

  • Under this scheme, to apply for a loan, one has to fill a single application form. After filling the application form properly, all the necessary documents have to be submitted to SIDBI’s office. If you are eligible, your loan is approved within 48 hours.
  • Processing is free in the SHWAS & AROG loan scheme. Along with this, a credit guarantee scheme (CGTMSE) is also available on the loan.
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Benefits of SHWAS & AROG loans scheme

  • Under both schemes, MSMEs get loans with ease. However, the benefits vary. SIDBI is assists MSMEs in the healthcare sector by playing a key role in the war against the second wave of the COVID 19.
  • To provide immediate loan assistance for recovery and growth of MSME units during the pandemic.
  • The funds from the scheme are to be used to increase production and provide services related to the supply of oxygen cylinders, oxygen concentrators, oximeters and essential medicines. Those who are manufacturing any products related to fighting corona virus such as hand sanitizer, mask), body suit, ventilator, testing lab, etc. can get the benefit of these schemes.

Financial assistance amounting to a total of Rs. 178 crore has been sanctioned to more than 400 MSME units producing the products to fight COVID 19 in the financial year 2021. SIDBI has introduced these new schemes to help MSME units and expand their facilities quickly.

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