India's Yes Bank is offering a new working capital facility that aims to make letters of credit (L/Cs) more available for micro-, small- and medium-sized enterprises (MSMEs).

The Smart Edge for MSME facility aims to make it easier for businesses to access working capital and offers secured working capital loans of between 1-3 crore rupees (US$150,000-450,000).

First of its kind

Loans may be extended through L/Cs, bank guarantees or overdraft according to Yes Bank.

The bank claims the facility is a first of its kind because businesses will not have to provide financial statements in the credit appraisal process.

Instead, the bank will appraise customers' creditworthiness on the basis of turnover as indicated in a business's bank accounts and its General Sales Tax (GST) returns.


Yes Bank says the facility features a 'scorecard' running in the background to analyse credit indicators from both GST returns and customers' bank accounts.

Based on the score the scorecard gives, the bank would calculate the collateral cover requirement that will start from 85 per cent.

Application process

MSMEs can apply for the facility through any branch of Yes Bank.

Applicants are required to provide GST returns and operative bank account statements for the last 12 months for assessment.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.