MSME Ministry planning to launch portal to certify credit worthiness of MSMEs?

New Delhi, June 27 (KNN) In order to help credit starved MSME sector, the Ministry of Micro, Small and Medium Enterprises (MoMSME) is planning to come out with a portal to certify credit worthiness of MSMEs which would help them get loan from the banks.

The certification will be based on certain identified parameters which can be submitted to banks when loans are applied for.

Sources from the Ministry of MSME told KNN India that the Ministry has asked NSIC to come up with such a portal.

However, the official added that it is in the initial discussion level and might take two to three months for any concrete plan on this to come up.

The move comes in the wake of complains and reports that the MSME sector which has a huge contribution towards country’s GDP and export basket is deprived of cash from the banks.

The entrepreneurs have been bringing out the issue that they have to run from pillar to post to get their loans sanctioned.

The official said that the motive behind the portal is to rate the credit worthiness of a proprietor or firm based on certain criteria and after doing due diligence and then generate a certification for them.

Even after obtaining a good credit certificate, in case the banks deny loan to them, they would be asked to give an explanation.

The criteria would basically be – track record of previous repayment record of the individual to the assets possessed.

According to a report, only 33-34% of firms from MSME sector have an access to banks and institutional financing channels while rest of them resort to informal channels like friends, family and other personal channels for raising loans.

The report highlighted that lack of adequate finance due to shortage of organized lending from banks and other formal institutes along with absence of transparency posing severe challenges in front of MSMEs to obtain loans. (KNN Bureau)