Ujjivan Small Finance Bank, a wholly-owned subsidiary of Ujjivan Financial Services Ltd, has launched overdraft (OD) facility for micro and small enterprise (MSE) customers across its branches nationally. The facility is an add-on product to the existing MSE term loans offered by the bank.

The OD facility is offered to all MSEs with a turnover of Rs 50 lakh or more, at a competitive rate of interest. This interest rate is for one year, with a credit limit between a minimum of Rs 11 lakh to a maximum of Rs 50 lakh, which can be renewed annually.

A key feature of the facility is that it allows MSE customers to pay EMI only on the utilised amount and repay the amount at any time during the tenure of the OD facility, to replenish the credit limit back to its original amount.

The special feature empowers MSE customers availing of the credit limit to manage their cash flows smartly and more efficiently and is designed keeping in mind that loans to this segment are better left flexible, considering their dynamic and variable funding requirements.

Ujjivan SFB also offers composite loans, where the overdraft facility can be combined with existing MSE term loan products. This helps customers take care of their long-term and short-term business requirements.

Samit Ghosh, Managing Director & CEO, Ujjivan Small Finance Bank Ltd said, “This offering is aimed at MSEs that don’t have easy access to formal credit given their turnover limitations. With this facility, we now offer a complete range of formal banking solutions to MSEs to meet all their business needs.

Ujjivan’s existing product offering for MSE customers is in the form of term loans. Given the funds requirement for working capital purposes, and sometimes for short-term purposes, overdraft limits would help customers meet the fluctuating requirements of working capital throughout the year.”

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