GeM Sahay - Instant Working Capital Loans for GeM Sellers in India

The table below contains all the information that an applicant would need to apply for the GeM Sahay loan.

GeM Sahay is a purchase-order-based digital lending scheme integrated into the Government e-Marketplace (GeM). It operates on the OCEN (Open Credit Enablement Network), a credit infrastructure regulated by the RBI. It was introduced in 2021 and enables MSME sellers to get instant working capital loans by pledging their accepted government purchase orders as collateral without the need for a surety or additional documentation.

The scheme, to date, has disbursed over 23 crore to more than 14,000 sellers. Its updated version, GeM Sahay 2.0, opened doors to all sellers for loans, increased the loan limit to 10 lakh, and reduced the approval time to ten minutes. Those who do not have a business on GeM should first do GeM seller registration before applying for a loan.

Handling a government contract will not always be a smooth operation. Procurement cycles sometimes involve managing a government contract, which is not at all easy. Government procurement cycles take a lot of time. Vendors are paid by the government only after delivery, and sometimes even weeks later. But the vendor has to first get the materials, manage the logistics, and keep the staff paid upfront.

Taking loans from banks is a whole big process with numerous stages and requirements. There can be many challenges to face. The process may take weeks, with issues with the clearances of unnecessary documents. Also, there is always a risk of the application getting rejected. This can thereby make the whole application procedure inconvenient when it comes to the government order cycle. GeM Sahay is the solution to this problem.

Most of the GeM seller community will be able to meet the eligibility criteria without much difficulty. They are conceptually reasonable and straightforward. In order for a seller to be considered for a GeM Sahay loan, one must satisfy the GeM loan eligibility criteria:

If you haven’t registered your business on GeM yet, you need to do this first. Professional Utilities can do the whole GeM seller registration for your GST validation, MSME credential setup, and profile completion so that you can get GeM Sahay at the earliest.

GeM Sahay has been largely improved over the first version. Sellers will find these features to count on:

• Instant Loan Disbursement : Loan processes usually take a lot of time, which puts sellers at risk of losing opportunities. GeM Sahay provides instant loans, creating a seamless pathway for the sellers.
• Amount of Loan : Sellers can obtain loans starting from ₹5,000 and up to ₹10,00,000. The amount is sufficient to cover government purchase orders of micro to small scale. This loan amount is available right at the point of order acceptance on GeM. The buyer cannot intervene in any stage of the loan application process.
• Loan-to-Value (LTV) Ratio : Sellers can obtain a maximum of 80% of the value of the purchase order. For example, if an order is worth 10 lakh, then there can be a release of up to 8 lakh in working capital without the need for the seller to wait for delivery or payment.
• Repayment Tenure Sellers have up to 120 days to repay their loans. This tenure generally aligns well with government procurement cycles for making payments, making it easy to handle.
• Interest Rate : The starting rates are below 30%. But the actual investor’s interest rate depends on factors like the lender's and the CIBIL score. Due to the number of lenders competing on the platform, sellers commonly get great terms.
• Processing Fee : A commission may be taken by a lender as a processing fee on the loan amount. Every cost will be made transparent before a seller agrees to any offer.
• Pre-Approved Loan offers : Lenders scrutinise a seller’s GeM transaction history of the last 12 months. Sellers who have done well and have a 4+ rating are given the opportunity to get pre-approved offers, which are simple, fast, and come with better terms.
• Auto-Repayment Setup : By setting up auto-repayment at the time of accepting a loan, sellers not only ensure that repayment is well-organised and pre-arranged but also mitigate the risk of default. Also, it keeps their GeM credit record in good shape.
• Fully Digital and Paperless : This complete procedure is carried out using the GeM Sahay mobile application. Sellers need to provide only the basic KYC documents like PAN, Aadhaar, and GST. No physical documents are handled.
• OCEN Structure Protection : The Open Credit Enablement Network (OCEN) regulates the sharing of data. A seller’s data is transferred by GeM to the lenders only after obtaining the seller’s explicit consent. And every data transfer is recorded and can be audited.

GeM Sahay is much more than just a loan. It is a form of structural support integrated into the procurement cycle. The advantages are tangible and immediate.

• Immediate Working Capital : Funds are provided even before delivery, not post delivery. The seller can no longer end up postponing or refusing orders due to a lack of cash.
• Up to 80% of Order Value Released : Sellers don’t need to wait for the complete payment. They can get available credit worth 80% of the order’s value, therefore, providing them with substantial flexibility for the sourcing, production, and delivery processes.
• Competitive Pricing via Multiple Lenders' Choices: Multiple banks compete for an individual seller’s application. So, the sellers receive offers from different sources and not just the price decided by one bank. The approximate rates below 30% keep the cost of borrowing at reasonably low levels.
• Short, Easy Repayment : The maturity of 120 days or less is well aligned with the government payment cycles. The sellers make the repayment from the same amount as the buyer from whom they are awaiting payment, thereby the scheme closes the circle by itself.
• GeM Rankings : Getting capital in hand in advance, the vendors quickly procure materials, meet delivery timelines, and earn higher performance scores on GeM. Higher scores translate to a greater volume of orders.
• Completely Clear Process Each and every stage is recorded on OCEN. Any charges are explained before deciding to take the loan. There are no hidden, free, or non-transparent decisions.
• Enable Business Expansion: With recurring working capital support, MSMEs can aim for higher value tenders, diversify their product ranges, and continuously increase their proportion of government procurement.Companies that are presently engaged in selling their goods and services on GeM will see GeM Sahay as a financial partner that links the complete cycle of a business - from listing, receiving orders, meeting orders, and getting payments.

GeM Sahay is a lender-agnostic platform. Every bank and NBFC under the RBI comes to join. This open architecture guarantees participation and rate competition.

UGRO Capital was the first to adopt our platform. Since then, the network has grown to include other leading public sector banks, private banks, and NBFCs. Current and active lending partners include:

The Ministry of Commerce still calls for more banks to enter. Every phase is contributing to expanding the network. More partners mean more alternatives and lower costs for sellers.

Compliance with ePBG features can seem quite intricate, more so when someone is a first-time seller. Moreover, there's a silver lining in that Professional Utilities has already assisted various sellers all over India in effectively handling their GeM accounts.

Getting onto GeM is the precondition for everything else, even GeM Sahay. Lenders will look at a seller’s GeM history before making an offer. If a seller’s profile is clean and well-organised, their loan will be quickly approved and will carry good terms.

Though if a seller’s profile is incomplete, they have no GST credentials, a non-verified PAN, or a dead listing, they may be delayed or even completely prevented from accessing credit. Professional Utilities is the expert in getting your company GeM-ready from scratch.

Our team will take care of GeM seller registration, vendor assessment, GeM brand registration, listing of products and services, and GeM retainership.

If a business needs to be OEM, we can assist with deemed OEM registration on GeM. Apart from GeM, the Professional Utilities also offers an end-to-end business compliance lifecycle, GST registration, brand registration, etc. It also offers MSME/Udyam registration, trademark registration, and an import/export code. For MSMEs to further bolster their procurement credentials, ZED certification, and the Make in India certificate can also be obtained via the same team.

The great majority of GeM registrations are finalised in 24 to 48 hours. Begin your journey with Professional Utilities right away. GeM registration starts from ₹1,499, and the team will take care of all the paperwork and the first listing so that sellers can get GeM Sahay without any waiting.