Information on union bank of india loan schemes, sme loans, micro financing in India | SupportBiz

Union Bank of India

With a growth rate of 45 per cent this year, Union Bank of India (UBI) claims to have the highest growth in the banking sector. The bank has helped over 35,500 SMEs during the year 2012-13, and the target for 2013-14 is 45,000 SMEs.

In an exclusive interaction with SupportBiz, GY Mishra, Deputy General Manager, Head Office, UBI, stated that all district heads would be contributing towards enlisting new SME clients.

Excerpts from the interview:

Could you share some details about the major MSME financing schemes offered by UBI?

There are over nine schemes catering to the needs of micro, small and medium enterprises (MSMEs) across the country (http://www.unionbankofindia.com/).

Some of the schemes are as follows:

Union High Pride: This scheme can be availed for the purchase of machinery or equipments or for the construction of sheds. Loans between Rs.5 crore and Rs. 25 crore can be availed of under this scheme. The rate of interest varies from 14 per cent to 15.25 per cent.

Union SME Plus: This scheme helps businesses from the SME segment to meet their short-term working capital requirements. Suitable collateral and third-party guarantee is required to avail of loans under this scheme.

Union Support: Under this scheme, composite term loans are available, which can be utilised for the purchase of shops, establishments and office equipment, including vehicles, as well as for meeting working capital requirements. The rate of interest under this scheme is  13.5 per cent. No collateral or third-party guarantee is required to avail of such loans.

Union Transport: This scheme offers loans to transport operators, for the purpose of buying up to 10 vehicles of any make. The rate of interest under this scheme ranges from 14 per cent to 15.25 per cent. The repayment of these loans can take up to five years, with a moratorium of six months.

Union Cyber: This scheme enables one to set up a cyber cafe, offering funds for the purchase of computers, PCO and other equipments of furniture. Preference is given to women entrepreneurs under this scheme. No collateral is required. The rate of interest for such loans is 15.25 per cent.

Generator Sets In Power-deficient States: The purpose of this scheme is to help SMEs purchase diesel generator sets of a standard make, of appropriate capacity. The rate of interest on loans under this scheme is 14.25 per cent. The maximum period for which loans are offered under this scheme is 60 months, with a moratorium period of six months.

Hosiery Units in Kolkata:  This is a scheme dedicated to hosiery units in the city of Kolkata, under which funds are offered for the replacement or purchase new machinery or equipment. The rate of interest under this scheme is 14.25 per cent.

What are the collateral requirements for MSMEs under these schemes?

No collateral is required for loans of up to Rs. 1 crore.

What are the major attractions of the MSME financing schemes offered by Union Bank of India vis-a-vis those of other banks?

UBI has over 350 business branches across the country. It also has 10 mid-corporate branches, with 11 such new branches to be opened in the year 2013. We are open to give loans even to units having a turnover of less than Rs. 5 crore. The bank provides excellent services, with specially installed machines for purpose of depositing. There are extra staffs to attend the SME customers, and our processing centres are now being converted into centralised ones. We also have special schemes for certain SME clusters, under which we provide loans at lower rates of interest.