Bengaluru, Jan 12 (KNN) Calling out the Rs 10 lakh decade-old limit set on collateral free loan, Karnataka Small Scale Industries Association (KASSIA) has requested the central government to raise the limit to Rs 50 lakh for micro, small enterprises (MSEs) which will resolve one of the financial challenges faced by small industries.

In its pre-budget memorandum submitted to Union Finance Minister Nirmala Sitharaman, KASSIA’s President K.N. Narasimha Murthy has suggested that it should be made mandatory for banks to sanction loans to MSEs within a week.

Speaking exclusively with KNN, Murthy expressed his expectations from the upcoming annual budget and said that the association looks forward to timely intervention so that the MSEs are able to overcome the difficulties and continue to serve the Indian economy.

From its slew of financial recommendations, the association has proposed the government to lend MSMEs at sub-PLR rate which should be at least 2 per cent less than PLR.

Referring to the primary financial institute for promotion and development of MSME industry, KASSIA has recommended SIDBI to deepen its outreach and strengthen its reach across India.

Highlighting the issue of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, it has suggested that the credit cover should be increased from Rs 2 crore to Rs 5 crore and its fee must be reduced to less than 0.5 per cent to cut the cost of finance to the MSME sector.

Delayed payments being one of the core challenges of MSMEs, KASSIA has agreed to the RBI Committee which has recommended to make it compulsory for MSMEs to upload the receivable details to an information utility, so that action can be initiated against the defaulting buyers.

Murthy opined that this is very essential as the small units may not otherwise raise their voice against large buyers in fear of losing business.  (KNN Bureau)