Kamath Committee submits report; aims to triple MSME lending to 30 lac crore
Updated: Feb 16, 2015 05:42:57pm
New Delhi, Feb 16 (KNN) The Committee on developing financial architecture for MSMEs, headed by Chairman of ICICI Bank, KV Kamath has proposed a financial architecture to take MSME lending from the current level of rupees 10 lac crore to 30 lac crore.
The Committee which was set up last year by Department of Financial Services, Ministry of Finance, has submitted its report to the government few days ago.
Besides Kamath as Chairman, the members of the committee included secretaries of DIPP, MSME, Skill Development and Entrepreneurship, CMDs from banks, representatives of FISME among others.
The report assumes that its recommendations would result in reduced operating costs, augmentation of existing credit analysis processes with use of payment information for assessing credit worthiness and reduction in credit costs for financiers and borrowing costs for MSMEs.
The Committee has stressed on financial inclusion and expanding outreach of financial intermediaries.
The report also proposes establishment of a receivables financing platform, seven fold increase in corpus of CGTMSE and expansion in coverage of credit bureaus to include a wider range of credit institutions to open up flow of funds to MSMEs.
Keeping in view that majority of MSMEs do not register themselves thereby pushing themselves to financial exclusion, it has recommended creation of a National MSME Authority under the Ministry of MSME to be a nodal agency to administer programs, facilitate ease of doing business and registration based on self-declaration with a simplified set of rules and documents. The Committee envisages that such an approach can achieve 95% registration amongst MSMEs in six months.
With budget around the corner, a few recommendations might see the light of the day sooner than later. (KNN Bureau)
The Committee which was set up last year by Department of Financial Services, Ministry of Finance, has submitted its report to the government few days ago.
Besides Kamath as Chairman, the members of the committee included secretaries of DIPP, MSME, Skill Development and Entrepreneurship, CMDs from banks, representatives of FISME among others.
The report assumes that its recommendations would result in reduced operating costs, augmentation of existing credit analysis processes with use of payment information for assessing credit worthiness and reduction in credit costs for financiers and borrowing costs for MSMEs.
The Committee has stressed on financial inclusion and expanding outreach of financial intermediaries.
The report also proposes establishment of a receivables financing platform, seven fold increase in corpus of CGTMSE and expansion in coverage of credit bureaus to include a wider range of credit institutions to open up flow of funds to MSMEs.
Keeping in view that majority of MSMEs do not register themselves thereby pushing themselves to financial exclusion, it has recommended creation of a National MSME Authority under the Ministry of MSME to be a nodal agency to administer programs, facilitate ease of doing business and registration based on self-declaration with a simplified set of rules and documents. The Committee envisages that such an approach can achieve 95% registration amongst MSMEs in six months.
With budget around the corner, a few recommendations might see the light of the day sooner than later. (KNN Bureau)
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