New Delhi The Government e-Marketplace (GeM) is likely to make public procurement more inclusive by facilitating collateral-free working capital loans up to ₹10 lakh in just 10 minutes at a concessional interest rate of 10% to small businesses, and boost its platform by adding over 250,000 gram panchayats as new buyers, a senior official directly involved in the scheme said.
GeM’s CEO Prashant Kumar Singh on Wednesday said that the provision will be rolled out shortly, and that the loans will be particularly beneficial for businesses owned by Scheduled Caste, Scheduled Tribe and women entrepreneurs.
“A digital financing facility based on 10x10x10 philosophy of right loan to right person at cost effective rate in least possible time is being launched soon,” Singh said, adding that a pilot project was successful with 13,400 registered sellers availing about ₹22 crore in loans with an excellent repayment record. “About 95% loans have been paid on time,” he added.
The loans are extended by financial institutions, mostly banks and non-banking finance companies (NBFCs), on the basis of orders in hand which also come through the portal. Small entrepreneurs have an online option to avail instant loans and recovery is easy as payments are processed through the same portal, Singh said.
According to official data, some of the partners in the projects are Aditya Birla Capital, AU Small Finance Bank, ICICI Bank, Kotak Mahindra Bank, Lendingkart, Oxyzo, Tata Capital, UGRO Capital, Union Bank of India. Public sector banks will participate soon, another GeM official said.
{{/usCountry}}According to official data, some of the partners in the projects are Aditya Birla Capital, AU Small Finance Bank, ICICI Bank, Kotak Mahindra Bank, Lendingkart, Oxyzo, Tata Capital, UGRO Capital, Union Bank of India. Public sector banks will participate soon, another GeM official said.
{{/usCountry}}Singh said corporate majors are also interested in handholding small entrepreneurs in this endeavour. GeM and Godrej Capital Nirmaan Platform have signed an agreement to strengthen the micro, small and medium enterprises (MSME)-seller ecosystem on GeM, he said. They will focus on activating an additional 15,000 MSMEs on GeM by providing training and helping in the disbursing of easy credit to them, he added.
GeM, which has already achieved transactions of about ₹5.5 lakh crore -- ₹2 lakh crore of this has come in FY23 alone -- is also planning to add about 250,000 gram panchayats as buyers. “Capacity-building was done through the government’s CSC (Common Service Centres) network,” Singh said. This move will give depth to the portal and promote “Make in India” in a big way, he added.
Roping in gram panchayats is an extension of the government’s move to include cooperatives. In June last year, it allowed about 854,000 cooperatives, including Amul and IFFCO, to purchase from the GeM portal. Though private players were allowed to sell their goods and services on GeM, this was the first time that private entities (cooperatives in this case) were allowed access to the government’s procurement portal as buyers.
According to Singh, GeM also has a stringent validation process to check the selling of goods from prohibited countries. The process has detected several prohibited sellers, particularly those dealing in laptops, desktops and servers, he said.
The government’s public procurement policy announced on July 23, 2020 bars the supply of goods or services from countries that share land borders with India without prior registration with competent authorities.