Ujjivan Small Finance Bank, a subsidiary of Ujjivan Financial Services Ltd., has announced the nationwide roll out of overdraft (OD) facility for micro and small enterprise (MSE) customers. An add-on product to the bank’s existing MSE term loans, the facility aims to assist businesses having a turnover of ₹50 lakh or more with funding to meet their long-term and short-term financing requirements.
The OD offered to all MSEs on a competitive interest rate is for a period of one year with a credit limit ranging from ₹11 lakh to ₹50 lakh, which can be renewed on an annual basis.
MSE customers are allowed to pay EMI only on the utilised amount, Ujjivan said in a statement. It also enables MSEs to repay the amount anytime during the tenure of the OD facility to replenish the credit limit back to its original amount, the lender said.
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“This offering is aimed at the MSEs who don’t have easy access to formal credit given their turnover,” Samit Ghosh, MD and CEO, Ujjivan Small Finance Bank said in the statement.
Given the requirement of funds for working capital, and sometimes for short term purposes, overdraft limits would help customers to meet fluctuating capital requirements, he said.
“With this facility, we now offer a complete range of formal banking solutions to MSEs to meet all their business needs. The existing product offering of Ujjivan for the MSE customers is in the form of term loans,” he said.
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