New Delhi, May 11 (KNN) The MSME ministry is in talks with Reserve Bank of India (RBI) to explore more ways to improve the credit flow to Micro, small and medium enterprises across the Country, a top government official informed the media.

About this, MSME Secretary SK Panda said "In order to ensure that credit flow for MSMEs is up to the expectation, gaps are bridged and their problems are addressed, the ministry is holding discussions with the Reserve Bank of India (RBI).”

Further, to fill the credit supply and demand gap, Panda said discussions are in process with RBI about promoting fintech companies which can easily reach out to MSMEs all across India compared to scheduled commercial banks.

Besides, the Ministry is looking at measures to address the issues related to decline in exports, Panda added.

In this direction, the MSME ministry will constitute a special task force to find exactly the steps and measures required to enhance exports in order to make them a part of global value chain, he said while addressing an ASSOCHAM Conference.

Speaking about the credit flow guarantee, he said the quantum of credit guaranteed by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) may touch Rs 50,000 crore this year.

In light of this, he said “we have taken some decisions, we are allowing NBFCs (non-banking financial companies) partial collateral and this year, unlike previous years where, from fund we used to guarantee a credit flow of Rs 19,000-20,000 crore every year for last three years, we plan to cross Rs 40,000 crore, it may touch Rs 50,000 crore.”

Based on the release issued by Assocham, he said that the MSME ministry has taken certain concrete steps as a part of structural reforms and expecting about 4 lakh such credit proposals.

Noting, MSMEs comprise almost 95-96 per cent out of the one crore entities registered in the Goods and Services Tax Network (GSTN), Panda said a database is needed to communicate and tell them about the facilities which they can avail.

Also, to address the problems faced by MSMEs an integrated database is required where the ministry can communicate with the MSMEs and thus in this direction we are trying to work closely with GSTN, Panda added.

He said the ministry will seek support of state governments to put up details of MSMEs on the Samadhan Portal so that payments due to small enterprises do not get stuck.

Besides, EXIM (Export–Import) Bank managing director David Rasquinha suggested RBI to look at further dialogue with the Ministry of Finance and the International Basel Committee to find a way to make trade finance more reflective of the actual risks rather than a perceived artificial framework which relies predominantly on rating.