Guwahati, Feb 18 (KNN) Apart from economic slowdown which is killing Micro Small and Medium Enterprises (MSMEs), the lack of basic understanding of financial products and services is equally responsible to restrict them from flourishing.

“The lack of basic understanding of financial products and services, banking procedures and risk-return framework inhibit the progress of MSME units,” said RBI Regional Director for North Eastern Region, Manoranjan Dash, while inaugurating the ‘Financial Literacy Week 2020’ here.

He said MSMEs play a significant role in economic development, in terms of their contribution to employment generation, innovation, exports and inclusive growth adding that ''the union government and the RBI have adopted several measures for orderly growth of the sector.

The fourth edition of the Financial Literacy Week held from February 10-14 themed 'MSMEs focused' on collateral free loans, trade receivables discounting system (TReDS), formalisation and timely repayment of loans, and how they benefit by being a part of the formal banking system.

The sector contributes about 45 per cent to manufacturing output, more than 40 per cent of exports, over 28 per cent of the GDP, while creating employment for about 11 crore people, the RBI release said.

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