MSME Receivable Finance Scheme (RFS)

What is the scheme?

SIDBI introduced MSME Receivable Finance Scheme (MSME RFS) to mitigate the problem of delayed payments to MSMEs with respect to their credit sales to large purchase companies. This is done by offering finance against bills of exchange/Invoices arising out of such sales. The scheme covers discounting of bills of exchange/invoices as a result of sales or supply of services by an MSME unit.

How much funding can a unit expect under the Scheme?

The funding is based on the requirement. However, maximum funding is limited to ₹ 50 Crs.

Which units are eligible under this scheme?

Either the Purchaser or the Seller needs to qualify as an SME (manufacturing/service sector unit). Other Eligibility parameters include satisfactory financials viz—turnover, net worth, profit, positive cash flow, liquidity position, etc.

What are the loan tenure options?

As this scheme comes under the Working capital, the limits are sanctioned with the validity for one year, with a half-yearly review and annual renewal. Usance of Bills of Exchange / Invoice not exceeding 90 – 180 days.

What kind of collateral and margin is required?

The value of the collateral depends on the external rating of the purchaser corporates. The Purchaser Corporates whose external rating are “AA“ and above are only eligible for sanction of clean limit on merits. The rate of discount too linked to external/internal rating of the corporate and MSME.