Need better coordination and specialised banks to boost MSMEs: Muniyappa

Union Micro, Small and Medium Enterprise Minister K H Muniyappa on Wednesday stressed on the need for coordination between the entrepreneurs, bankers and government to increase export of various MSME products and make them globally competitive. He was speaking at the National Conference on “MSME Financing and Strengthening MSME Linkages” organised by the Indian Chamber of Commerce in Kolkata.

The minister also called upon the nationalised banks to set up at least one dedicated MSME branch in each district throughout the country and urged them to reach out to villages, extending coordination to the MSME entrepreneurs.

He further said that prominent banks should set up MSME specialised branch in every district in eastern and north-eastern India to address finance related issues of MSME units.

“Within 3 months, prominent banks should setup at least 1 MSME specialised branch in every district to Eastern and North-Eastern India to address finance related issues of MSME units," said Muniyappa.

“To boost export in the sector, we need to upgrade our Research and Development (R&D) and marketing strategy to make the MSME produce globally competitive and acceptable products,” the minister added.

Canara Bank BSE 0.84 % CMD R K Dubey, who was present at the occasion, explained how they are progressing in this direction and have already established dedicated MSME branches in each district of Kerala.

Explaining the Centre's role in the sector, Muniyappa said the government is implementing the Credit Guarantee Scheme where it provided guarantee cover up to 85 per cent on collateral-free credit facility extended by lending institutions.

“The 12th Plan has earmarked Rs 24,000 crore to emphasise growth in industrialisation in the entire country as against Rs 11,000 crore earmarked in the previous Plan,” he stated.

Muniyappa said that being the nodal agency of entrepreneurship development in the country, the MSME ministry is providing skill development through its state-of-the-art Tool Room and Technology Development Centres to help youths. “We have a target of training 1.5 crore persons by 2022 and more than 40 lakh persons during the 12th Five Year Plan,” he said.

Giving importance to cluster upgradation in the MSME sector, Muniyappa said that in case of clusters owned and managed by women entrepreneurs, the contribution of the MSME ministry towards financial support could be up to 90 per cent of the project cost.

The minister also said that the mandatory clause of procuring at least 20 per cent of MSME produce by the central government offices would promote the sector by improving their market access.