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Banks should extend a helping hand to MSMEs: ICCI

Updated: Apr 06, 2017 05:36:48am
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Banks should extend a helping hand to MSMEs: ICCI

New Delhi, Apr 6 (KNN) There is a need to create an ecosystem which can facilitate nurturing of the Micro, Small and Medium Enterprise (MSME) units right from nascent stages, said an industry expert. 

The small entrepreneurs are spread across remote locations and don’t necessarily have banks in the proximity, D. R. Kodeeswaran, Secretary, Indian Chamber of Commerce and Industry, Thoothukudi said outlining the problems that haunt the growth of the MSME sector in India.

According to a national daily, he highlighted the fact that large-scale retirements in banks in recent years had adversely impacted the collective skill-sets available in understanding, appraising and monitoring the MSME loan portfolio.

He further added that the banks were mandated not to accept collateral security in the case of loan up to Rs. 10 lakh extended to units in the MSE sector. Instead these loans were to be covered under the credit guarantee scheme for the MSE.The banks should also keep a provision for additional credit limits in order to provide timely financial support to the micro and small enterprises facing financial difficulties.

Dissecting the Post-Demonetization scenario for the MSMEs he said “After the demonetisation policy, the banks were sitting on 100 lakh crore of INR deposits. They were reluctant to finance the business and industry for various reasons and concentrating only in the home and personal loan sector”.

He pushed that the RBI should take into consideration these issues and to instruct the banks in the right direction to enable excess liquidity available with the banks to be put into productive use. He also proposed a memorandum to the Deputy Governor of RBI, R. Gandhi for the same. (KNN/ DA)

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