"Loan requests for up to Rs. 1 crore will be cleared in about the same time it takes for your morning commute," he said.
The programme was unveiled as part of 12 new decisions to aid the sector which, the PM said, were like "Diwali gifts for MSMEs".
The announcement is a counter to overtures to small businesses already made by the opposition Congress. Party chief Rahul Gandhi said in August he would seek to shift the focus of the country's economic policy towards supporting small and medium-sized firms if the opposition won power in next year's election.
"As we speak, somewhere in the country your entrepreneurial brother or sister is getting a loan... sanctioned in just 59 minutes," PM Modi said. "Think, only 59 minutes. Just 59 minutes."
The other measures announced today included an increase in the share of small and medium industries in government procurement from 20 to 25 per cent. He also announced a 2 per cent interest relief on loans up to Rs. 1 crore for small businesses that file GST (Goods and Services Tax) returns.
PM Modi also announced that inspections of factories in the sector will be sanctioned only through a computerised random allotment and inspectors will have to upload reports on portal within 48 hours. "No inspector can now go anywhere. He will be asked why he went to a factory," he said.
Easing compliance with environmental rules, MSMEs will need single air and water clearance and just one consent to establish a factory.
"These 12 decisions are not just Diwali gifts for MSMEs but will also herald a new age and new chapter for small enterprises," PM Modi told a gathering at Delhi's Vigyan Bhawan.