New Delhi, Dec 26 (KNN) Lack of adequate finance is one of the main reasons for closing of Micro, Small and Medium Enterprises (MSME) units,  said Jaimin Vasa, President of Gandhidham Chamber of Commerce and Industry (GCCI) calling for proper as well as timely hand-holding support to ensure survival of MSMEs.

He said this during a meeting of businesses held under GCCI, Reserve Bank of India (RBI), Public Sector Banks (PSBs), Private Banks and Non-Banking Finance Corporations (NBFCs).

The discussion was held on the topic 'Finance: A Key Criterion for Sustainability of MSMEs' to create a joint strategy for increased lending to MSMEs in the current scenario.

Small businesses get just about half the loan they require, the apex body for trade and commerce said.

Bankers on the other hand asked businesses to make their accounts transparent so that disbursement of loans is not delayed.

"There is still a huge gap of around 50% between the requirement of finance for MSMEs and finance provided by the financial institutions," said Vasa.

He added that MSME sector is the worst hit segment in such cases and is also always among the first to be hit.

"Often it is found that businesses utilize a part of loan for personal expenses rather than business purposes. This is bad both for the businessman and for the bank as well. Then there are demands for loan waivers and haircuts. This can't be allowed," said a senior official of a leading PSB.

For periodic monitoring of the economic scenario and suggesting corrective measures for financing MSMEs, GCCI and bankers decided to set up an advisory task force consisting of leading bankers from public, private and co-operative sectors and representatives from GCCI.