In a move aimed at fostering the growth of the food processing industry in Andhra Pradesh, the state's Food Processing Society (APFPS) signed a Memorandum of Understanding (MoU) with the State Bank of India (SBI) on Wednesday. The partnership is set to support the establishment and upgradation of at least 7,500 micro food processing units in the state during the fiscal year 2023-24, under the Prime Minister Formalization of Micro Food Processing Enterprises (PMFME) scheme.
As part of this agreement, SBI will provide collateral-free loans of up to ₹10 lakh ($13,500 approx.) to eligible beneficiaries of the PMFME scheme, subject to their creditworthiness. These loans will follow the guidelines of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) under the Agri Infrastructure Fund (AIF), carrying an interest rate of 9% under AIF. An additional 3% interest subvention will be applied where applicable.
To facilitate the initial stages of these enterprises, a moratorium period of three months will be granted. Furthermore, SBI expressed its willingness to support the promotion of food processing units through collaboration with Farmer Producer Organizations. A separate plan of action for this purpose is currently being considered.
The MoU was signed by APFPS CEO, L Sridhar Reddy and deputy general manager of State Bank of India, V Hema in the presence of principal secretary, Chiranjiv Choudary. The partnership signifies a collaborative effort to stimulate economic growth and job creation in the state.
Sridhar Reddy commented on this significant partnership saying, "This partnership with a financial powerhouse like SBI will provide a significant boost to micro food processing enterprises in the State."
In the previous fiscal year, SBI had already sanctioned over 500 loans under the PMFME scheme, marking itself as a major lending partner in this endeavour.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.