New Delhi, Dec 3 (KNN) MSMEs face serious challenges for survival, despite Government announcing a number of benefits and giving priority from time to time for its support, said Karnataka Small Scale Industries Association (KASSIA).

Micro, Small and Medium Enterprises (MSMEs) in tier-II and tier-III cities and rural areas were faced with more difficulties and challenges than those in major cities, expressed KASSIA.

President of KASSIA, Basavaraj S Jawali said frequent changes in policies and procedures in allotment of land and inadequate supply of power and water were causing havoc to the development of MSMEs in the State.

What is worse is that the input costs over which nobody has any control in the free market environment have constantly gone up, making a large number of MSMEs completely unviable, he said.

KASSIA sought loans at 4 per cent interest to MSMEs for reducing the mortality rate in the initial phase and help them establish and sustain.

KASSIA also sought that the subsidized funding available to SMEs should be increased to a maximum of Rs 5 crore.

Some of the critical issues that hamper their development were absence of access to easy finance and credit instruments, serious regulatory constraints, lack of access to modern and affordable technology, lack of basic infrastructure, lack of access to modern marketing and distribution networks, shortage of skilled labour and inflexible and archaic labour laws, according to KASSIA.

The Mysore Industries Association (MIA) pointed out that less than 10 per cent of entrepreneurs take loan from banks and almost 90 per cent of the businessmen in the MSME sector were forced to take loan from moneylenders who are registered non-banking finance companies.

The Mysore District Micro, Small and Medium Enterprise Association (MDMSMEA) have sought the intervention of the Reserve Bank of India (RBI) to crack down on foreclosure charges levied by non-banking financial companies.

There is also a case to regulate the rate of interest levied by them.