Coimbatore MSMEs seek increase in upper limit for collateral free automatic loans

Coimbatore, May 11 (KNN) Coimbatore District Small Industries’ Association (Codissia) has proposed the Union Finance Minister Nirmala Sitharaman to increase the upper limit for collateral free automatic loans for MSMEs. 

The association has said that this move will help units get funds for operational liabilities and to restart businesses.

Presenting the demands of MSMEs, Codissia, President M.V. Ramesh Babu urged the government to set up a separate committee to study and set parameters for MSMEs so that they had easy access to funds. 

Highlighting the challenges faced by MSMEs with regards to credit, he said lending institutions insisted on high credit scores and security collaterals, which many small-time borrowers did not have. 

MSMEs are caught up in complex eligibility factors and in filling up documents as they do not have knowledge of digital lending channels, which delays getting finance and liquidity, he added. 

Codissia has also called for fixing the margin money for micro and small scale companies at 10 per cent and announce waiver on loan processing fee. (KNN Bureau)