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Over 88,500 MSMEs facing demand and credit issues: Muniyappa

Tags: MSMEs, K H Muniyappa, sick MSEs, demand, credit, Rajya Sabha, RBI

March 05, 2013 | COMMENTS ( 0 )

Over 88,500 MSMEs facing demand and credit issues: Muniyappa

The government on Monday said there were over 88,500 sick micro, small and medium enterprises (MSMEs), which have been facing challenges like lack of demand and issue of inadequate credit, as on March 31, 2012.

"There were 85,591 sick micro and small enterprises (MSEs) and 3,044 sick medium units in the country at the end of March 2012," said MSME Minister K H Muniyappa referring to the RBI data from scheduled commercial banks.

In a written reply to the Rajya Sabha, Muniyappa said that the major factors affecting growth of MSMEs include lack of demand, shortage of working capital, marketing problems, shortage of raw-material and power crunch.

He further said that the rehabilitation package for the revival of viable sick MSEs is provided by primary lending institutions, including commercial banks, which provide credit to the these units. The package is determined as per the norms issued by the RBI from time-to-time, the minister added.

The latest guidelines were issued by the RBI in November 2012, based on the recommendations of a committee set up by the MSME Ministry to examine the definition of sickness and the procedure for assessing the viability of sick MSEs.

These norms include early detection of sickness, a viability study to form the basis of rehabilitation package to potentially viable sick MSEs and a non-discretionary one time settlement scheme for the MSE sector.

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