2010-11-12

Facilitating Credit via Mid-Level

Access to credit remains a major problem for the MSME sector, a middle level institute would be much of a help.

Facilitating Credit via Mid-Level

Access to credit, remains a major problem for the MSME sector. MSME is mostly an informal sector with 94% of unregistered units and 97% of un-incorporated units operating under the umbrella. Access to adequate funding is a major problem in this sector. An RBI report shows that only 5% units in this sector has access to institutional funds. Even though lending to MSME is compulsory for commercial banks as part of priority sector lending (PSL), which is 40% of its total lending, they are not given a fixed target for disbursal to this sector like in agriculture (18%).

 

The present financial flows are hugely insufficient.  Sidbi takes up the role of refinancing from time to time and NSIC is a small, niche player. Keeping in view the size of the sector’s demand, their impact has been rather modest. MSMEs not only face difficulty in obtaining funds they also suffer from the poor quality of service, lack of transparency in costing and deficient domain knowledge of bankers.

 

Currently the MSME sector comprises around 26 million units. Around 70% of them are service enterprises. It is a hugely heterogeneous sector that includes every possible business activity. The major sub-sectors of the sector include food, textiles, engineering (using metals, plastics, chemicals, rubber etc), leather, telecom, machineries and machine components and pharmaceuticals. The sector is clocking a growth rate higher by two percentage points over the average industrial growth for years now. This drift is likely to continue for some time. Anil Bhardwaj, secretary-general, the Federation of Small and Medium Enterprises (Fisme), believes creating dedicated financial institutions to fund start-ups of first generation entrepreneurs would go a long way in fostering MSME.

 

Related opportunities
  • Mens Wear
    The Evolution of Park Avenue: A Legacy of Style and..
    Locations looking for expansion Maharashtra
    Establishment year 1986
    Franchising Launch Date 2023
    Investment size Rs. 50lakh - 1 Cr.
    Space required 1000
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Ratnagiri Maharashtra
  • Others Clothing
    Established in 1971, House of Sero is a heritage-driven menswear..
    Locations looking for expansion Maharashtra
    Establishment year 1971
    Franchising Launch Date 2025
    Investment size Rs. 50lakh - 1 Cr.
    Space required 1500
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Mumbai Maharashtra
  • Quick Service Restaurants
    Kathi Junction – brings the golden opportunity to start your..
    Locations looking for expansion Delhi
    Establishment year 2009
    Franchising Launch Date 2009
    Investment size Rs. 5lakh - 10lakh
    Space required 100
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater New delhi Delhi
  • HR & Recruitment
    ..
    Locations looking for expansion Maharashtra
    Establishment year 2016
    Franchising Launch Date 2018
    Investment size Rs. 50000 - 2lakh
    Space required 250
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Mumbai Maharashtra
Insta-Subscribe to
The Franchising World
Magazine
tfw-80x109
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
email
mobile
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities

Free Advice - Ask Our Experts

pincode
;
ads ads ads ads