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Govt intervention and bank support is necessary for revival of MSMEs in Kerala: KSSIA

Updated: Apr 19, 2018 09:02:38am
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Govt intervention and bank support is necessary for revival of MSMEs in Kerala: KSSIA

New Delhi, Apr 19 (KNN) Highlighting the financial crunch faced by Micro, Small and Medium Enterprises (MSMEs) in Kerala, the Kerala State Small Industries Association has demanded government's immediate intervention to revitalize the MSME sector.

Being a largest employment sector with 2 lakh small-scale industries operating in the state, industries are on the verge of closure due to financial distress.

Lack of working capital in the hands of MSME entrepreneurs is causing severe challenges post demonetization and GST.

In this regard, talking to KNN, Vice President of the association, Damodar Avanoor said that seeing the situation of turning loans into non-performing assets (NPA) and banks reluctant to offer loans to MSME sector, industries in Kerala are in danger.

He said, “Banks should be liberal in classifying NPAs and give some time and freedom to MSME sector for the repayment of loans."

He said that banks should offer little support to MSMEs in terms of financing also.

Len Philip, the association's district president, said that difficulties in SARFAESI Act have pushed many industries on the verge of closure.

He said that industries need moratorium on repayment and rescheduling of loans.

RBI policy changes from 180 days to 90 days a year to initiate a recovery measures on defaulters by financial institutions resulting in several loans converting into NPA which will in turn leads to closure of industry, he added.

Further he added that industries are still struggling with the bad effects of demonetization and GST framework.

Over MSME protection, he said that the rescheduling of loans would help the industries in infusing fresh working capital. (KNN/YV)

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