New Delhi, Mar 25 (KNN) Liberalised credit facilities combined with customer friendly schemes by various banks are providing a much needed boost to the MSME sector. 

The enactment of the Micro, Small and Medium Enterprises Act, 2006 to facilitate the promotion and development of competitiveness has set the tone for the progress of this sector.  

The Act has looked at defining and classifying micro, small and medium enterprises, establishing a board and advisory committee of various stakeholders, timely payment to SMEs, access to funds and financial assistance from formal channels, and reservation for SMEs among others.

The setting up of bodies such as the Credit Information Bureau India Ltd ( CIBIL), India’s first credit information bureau and SMERA (SME Rating Agency) has contributed greatly to the sector.

More recently, SME exchanges by Indian stock exchanges has given the sector another push in the right direction. This is expected to help SMEs raise money through other channels and get onto a growth trajectory.

Meanwhile, credit agencies like Investment Information and Credit Rating Agency of India limited ( ICRA), Credit Rating Information Services of India Limited (CRISIL) Credit Analysis and Research, Fitch, Onicra and SMERA are playing an important role in SME growth by providing additional credibility to SMEs in raising capital, acquiring better and more customers, availing of better deals and so on.

Significantly, the Small Industries Development Bank of India is promoting and financing SMEs in the country. The schemes that the banks can avail of are refinance schemes; bills finance schemes as also other promotional and development schemes.

Capital infusion
Public and Private Banks have also participating in the growth of SMEs which are providing loans at cutting interest rates, loans approvals without mortgage and collateral securities, the facility of overdrafts, towards improving credit flow to the sector and offering customised loans.

The Canara Bank in particular is focussing on better training of its staff to meet the loan requirement of MSMEs.  Moreover, banks such as the Corporation Bank, Tamil Nadu- based Karur Vysa Bank and TN Mercantile Bank have offered hassle free loans and adequate credit delivery to all SMEs.

Regional players
Among the regional players, Coimbatore District Small Industries Association (CODISSIA), a regional organisation in the South has brought focus on the need for technology upgradation by organising the INTEC fair.

INTEC serves as an opportunity for Indian companies to update themselves on technological developments happening in the international arena, while providing them an ideal chance to incorporate the same in their manufacturing units.   INTEC has gone a long way to promote SMEs of the region to market their products globally by adapting to very high quality standards and making Coimbatore a global manufacturing hub.

CODISSIA has been organising INTEC for the last 25 years.  

The number of MSMEs has increased from about 6.79 million in 1990-91 to over 13 million in 2007-08.  It accounts for 35 per cent of the gross value output in the manufacturing sector and contributes to more than 40 per cent of the total exports. (KNN)