Top Benefits of Taking An MSME Loan for Doctors in India

As per the Indian Medical Association declaration, hospitals and nursing homes in India have been granted the status of Micro, Small and Medium Enterprises. By registering under the MSME, the hospital sector can grow in tier-2 and tier 3 cities and easily avail funding such as MSME loans for doctors. 

The Government of India has extended the loan guarantee schemes to provide financial assistance to eligible medical firms. Thus, they can get liquidity benefits and other advantages by taking this financial product. Read on to know more about the benefits of availing MSME loans for doctors in India.  

Benefits of taking MSME loans for doctors

  1. Reduced interest rate

Hospitals can get financial products like MSME loans for doctors at a reduced interest rate. It means the hospital can avail of MSME financing at the same rate as other small businesses usually get. The interest rate for MSMEs has always been lower than regular loans. Thus, like businesses, hospitals can save a substantial amount on the interest rate and use the money for further growth. 

Therefore, with such a reduced interest rate, healthcare professionals who wish to start small clinics like dental, ophthalmic, and ENT clinics usually do not require admission can get low-cost loans.

  1. Decreased power tariff

The status of MSME will help hospitals and nursing homes on power tariffs as well. Previously, hospitals were changed at a commercial rate. However, as the MSME tag has been attached to hospitals and nursing homes, those institutions will get lower power tariffs than commercial tariffs.

  1. Upgradation facility

Under the Credit Linked Subsidy Scheme, hospitals can implement new technology and replace their old and obsolete technology. Hospitals and nursing homes are provided with a capital subsidy to upgrade medical equipment and implement new technology and methods to do their functions efficiently. Under the scheme, medical institutions can get a 15% upfront capital subsidy of up to Rs.1.5 lakh. This scheme extends subsidies to 51 sub-sectors or products. The implementation process is regulated by authorities that include SIDBI and NABARD.     

  1. Easy credit facility

The Government has offered Rs.3 lakh crore loan guarantee scheme to provide credit facilities to medical institutes. The scheme was a part of the Government’s Atma Nirbhar package; under the scheme, the Government extended full loan guarantees to the incremental loans given to individuals. 

Till now, financial institutions have approved loans of 1.37 lakh crore to 40 lakh MSME units and disbursed approximately Rs.88,000 crore. Now, the additional beneficiaries will get Rs.1 crore lakh. Thus, by taking financial assistance and adopting new technologies, they can offer advanced treatment and make their practice more visible.     

  1. Quick disbursal

Several financial institutions ensure the quick processing of MSME loans for doctors. Further, they can apply online and get instant approval and loan disbursal from the comfort of one’s home. Leading NBFCs like Bajaj Finserv offer loans for doctors as well as MSME financing for doctors up against minimal documentation. 

These financial institutions also extend pre-approved offers to make the loan availing process hassle-free. These offers are also available on other financial products, such as business loans, personal loans, loans against property, etc. Medical practitioners can check their pre-approved offers by entering names and contact details.   

  1. Flexible repayment tenor

Hospitals and nursing homes willing to take MSME loans for doctors can enjoy flexibility in repayment tenor. Though the tenor varies from one lending institution to another, usually borrowers can opt for a tenor of 12 months to 96 months as per their suitability. 

However, to avail of the benefits offered under MSME financing, a medical practitioner must fulfil the doctor loan eligibility, i.e. MSME eligibility set for professionals like doctors. Below are discussed the parameters medical practitioners must fulfil to get MSME financing.

Eligibility criteria for MSME loans for doctors 

The Government has brought some changes in the eligibility criteria and certain relaxed parameters to include more medical institutions. The new rules are mentioned below,

  • To get a credit facility under the Emergency Credit Line Guarantee Scheme (ECLGS), hospitals must have a turnover of Rs.250 crore. Previously, the turnover was set at Rs.100 crore.
  • Borrowers with an outstanding loan of up to Rs.50 crore (as of February 29) are eligible for a loan guarantee on additional borrowings up to 20% of their outstanding amount. Earlier, the limit stood at Rs.20 crore. As a result, an eligible borrower can avail Rs.10 crore guaranteed loan.

By fulfilling the eligibility criteria, medical practitioners can avail MSME loans for doctors and enjoy the benefits offered under it. 

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