FISME Meeting Highlights Persistent Financing & Dispute Resolution Issues for MSMEs

New Delhi, Jan 7 (KNN) Persistent problems faced by micro, small and medium enterprises (MSMEs) in getting finance, becoming formal businesses and resolving disputes were discussed at a stakeholder meeting jointly organised by Federation of Indian Micro and Small & Medium Enterprises (FISME) and Friends of MSMEs in Parliament in New Delhi on January 6.

The meeting brought together senior government officials, industry representatives and financial institutions to examine the key obstacles slowing MSME growth and to explore the need for stronger and better-coordinated institutional support.

Speaking at the event, Akash Pawar, Deputy General Manager at the Small Industries Development Bank of India (SIDBI), said, “A large part of India’s MSME sector still operates informally, even as the government works on updating the MSME definition under the MSME Act.”

He also noted, “Many enterprises remain outside the formal system, which limits their access to bank credit, government schemes, and grievance-redressal platforms.”

On access to credit, Pawar highlighted the role of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), which helps banks lend to MSMEs by covering a major part of the default risk.

However, he said financing continues to be difficult because banks often take a cautious approach, especially when businesses do not have collateral or a clear financial track record.

Shortcomings in systems meant to resolve disputes and complaints faced by MSMEs were highlighted. Although there are multiple options available—such as provisions under the MSME Act, the Samadhaan portal for delayed payments, and other sector-specific platforms—the lack of coordination among them often results in delays and weak enforcement.

The need for simpler processes and quicker resolution to build trust among small businesses was stressed.

Government initiatives such as the Sahay scheme, GST Express financing, and the Udyam registration portal were cited as important steps. However, Pawar noted, “Many MSMEs are still not registered on the Udyam portal due to low awareness and fears related to compliance, taxation, and regulatory checks.” These concerns, along with limited outreach, continue to slow formalisation.

(KNN Bureau)