SMILE---The interest-free seed fund from SBI

The State Bank of India’s new scheme SMILE might bring a smile to the face of entrepreneurs. Under the scheme the bank will provide interest-free seed capital of about Rs 10 lakh to aspiring entrepreneurs.

The scheme aims to benefit the small and medium enterprises (SMEs) of the nation, especially when the sector has not been able to raise enough funds during the financial crisis.

Presently, the loan amount given by the banks comprises 70-80 per cent of the project cost and is given only when the entrepreneur has enough capital to invest. But with the new scheme SBI will provide seed capital. There will not be any changes in loan terms and interest rates. Though there will be no interest charged on the seed capital and the amount can be repaid after repaying the loan.