90 per cent pending dues of MSMEs cleared: ADC, MSME
New Delhi, Aug 29 (KNN) The government has worked on clearing delayed payments and almost cleared 90 per cent of the pending dues of Micro, Small and Medium Enterprises (MSMEs) said, Anand Sherkhane, Additional Development Commissioner (ADC), of MSME ministry.
While speaking at a webinar organised by the PHD Chamber of Commerce and Industry on Debtors and Industry Protection through Insurance - Need of MSME Sector, on Friday, Sherkhane said, ''the government has worked on clearing delayed payments that has given some ignition to the reviving MSME sector. They are working diligently on it and uploading all the outstanding bills and almost 90 per cent of the payments have been cleared.''
Sherkhane also discussed various initiatives undertaken by the government for the Atma Nirbhar Bharat including subordinated debt and Fund of Fund (FoF) scheme.
He further said that there is a need to think for affordable credit insurance for which insurance regulatory bodies are making guidelines to cater to the needs of MSME sector adding, ''there is a growing need to educate and inform MSMEs about the benefits of having an insurance cover.''
Rishabh Jain, Manager SIDBI on deputation to credit monitoring cell, investment promotion, and finance division, the office of development commissioner, Ministry of MSME, Government of India, discussed the need for awareness about Insurance to the MSMEs that helps in mitigating any risks in the future.
''This needs to be done through an awareness campaign,'' he suggested.
V Rajaraman, EVP, Head of Institutional Business, IFFCO TOKIO General Insurance co. Ltd. mentioned that credit insurance plays a vital role in bad debts.
''The MSMEs are the most affected during Covid-19. In a trade credit insurance, they do not cover assets of the MSMEs, however, the delinquency and short-term receivables get covered under MSMEs. The risks involve loss of outstanding debts, the bad payment practices, high cost of labour,'' he opined.
The core economic situation adds up to the problem of MSMEs, he further added. He talked about the corporate strategy which should primarily be to start exports, enter new markets, and desire to delegate credit management to concentrate on core business activity.
S K Sethi, Founder & CEO, Insurance Foundation of India, in his presentation talked about the risks faced by MSMEs in India, the controllable and non- controllable risk involved and cited relevant examples.
He suggested that in a scenario such as shortage of working capital, no payments from the customers affecting business cycles, one should have a policy of the credit limit.
''Payment due date should be mentioned in the invoice and one should go for a proper GST invoice,'' he opined.