INSUBCONTINENT EXCLUSIVE:
times, official data shows state-run banks too are cautious in lending with total credit outstanding to the sector growing at just 7.38 per
cent to Rs 8.81 lakh crore in the three-year period ending March 2019.As the sector is considered a key growth engine accounting for about
90 per cent of businesses and more than 50 per cent of employment, the credit growth pattern is a matter of concern.Even as the government
has come out with measures to promote the MSME sector, nudging banks to lend more, it is yet to reflect in actual numbers
One of the key steps announced is providing loans to smaller firms within 59 minutes of application but industry leaders point to sluggish
disbursal under the scheme.As per data compiled by the Reserve Bank of India (RBI), the outstanding credit of Public Sector Banks (PSBs) to
the MSME sector increased from Rs 8.20 lakh crore in March 2016 to Rs 8.81 lakh crore in March 2019 (provisional)."Even after the
introduction of the 59-minute loan scheme, the disbursal rate is very poor
If you see the data of 59-minute approvals, it is not matching with the disbursal
Banks are still putting a lot of conditions and requiring a lot of paper work for disbursing the loan
We have apprised the government of this
The credit growth and disbursal are extremely poor," said Animesh Saxena, president of the Federation of Indian Micro Small and Medium
Enterprises (FISME).He further said that banks remain concerned with their rising non-performing assets (NPAs or bad loans) and scrutiny of
their management."As a result, paper verification and due diligence is very slow
They refuse loans to SME firms on small issues
MSMEs, generally have problems with their paperwork and are not as perfect as big corporates
Banks find lacuna in that," Mr Saxena added.The latest official data shows that out of 2,00,660 applications submitted, 1,59,583
applications for loans on the psbloansin59minutes.com portal have been accorded in-principle approval since the launch of the portal
Sanctions have been made in respect of 1,33,448 cases.In a meeting with the Union Minister for MSMEs Nitin Gadkari, the industry urged the
government to provide short and medium term support to beat the slowdown in the economy
Among the urgent steps, the industry has demanded doing away with the requirement of third-party credit rating of loans and enforcing
compliance of public procurement policy (PPP) that mandates government firms to take 25 per cent of supplies from MSMEs."While many
agencies/organizations are slowly moving to meet the target of 25 per cent procurement from MSMEs, the compliance is not even
It's time a few measures are thought to reprimand those who are not reporting/following the MSE-PPP," the industry representative urged
the government.Get Breaking news, live coverage, and Latest News from India and around the world on TheIndianSubcontinent.com
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