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2014-06-26

Govt working towards simplification of procedures for MSME: Mishra

MSME Minister Kalraj Mishra has assured the MSME sector that the government is working towards simplifying various issues such as finance, raw material, marketing, labour laws, NOCs and others including those related to procedural basis to help them tide over the problems the sector faces currently and with a view to encourage participation of more and more number of small industrialists in the MSME sector. The minister was speaking at India’s leading trade association, Assocham’s event in the Capital on improving access to finance to the MSME sector.

MSME Minister Kalraj Mishra has assured the MSME sector that the government is working towards simplifying various issues such as finance, raw material, marketing, labour laws, NOCs and others including those related to procedural basis to help them tide over the problems the sector faces currently and with a view to encourage participation of more and more number of small industrialists in the MSME sector. The minister was speaking at India’s leading trade association, Assocham’s event in the Capital on improving access to finance to the MSME sector.

 

“As has been advised by the Prime Minister, we will put in place a single-window clearance mechanism for the MSMEs and make all efforts to address the significant issues of raw material, marketing, capital and others in a specific timeframe,” said Mishra.

 

“Banks should make their loan procedures simplified especially for those enterprises that are not well versed with the banking formalities. Banks must encourage and inform them about the requisites for an ideal loan procedure for SMEs,” said P K Jain, Chairman, SME Council, Assocham.

 

More often than not, bankers regard MSME or MSE as the highest risk sector for giving loans vis a vis other sectors and hence reject the loan requirements of the sector.

 

“The problem of the gap between the demand and supply of finance to the SMEs by the banks is of risk perception. The MSME sector is considered to be a high risk area for the bankers. However as per RBI on March 2010, MSE sector had NPAs worth Rs 20k cr while other sectors had NPAs worth Rs Rs 61,740 cr. MSEs hence had around 1/3rd of this amount. In 2012-13 MSEs had NPAs worth Rs 31k cr whereas other sectors as on March 2013 had NPAs of Rs 1.52 lakh cr. Hence the bankers’ perception towards MSE having high risk is totally false,” said H P Kumar, CMD, National Small Industries Corporation.

 

“The MSME ministry on its own had established a mechanism called credit guarantee fund trust for MSEs where the guarantee is given by the ministry with the help of SIDBI to offer loan up to Rs 1 crore. Even then the lending ratio has not improved to the extent that the government had desired and what the sector required,” added Kumar.

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