Country’s MSME sector requires more financial support from the banks to set up businesses, but the business proposals will have to be viable to attract funding from the banks, a senior government official has said.
“The MSME sector requires more financial support from the banks to set up businesses. Since credit facilities are not easily available for the sector, MSME business proposals have to be viable enough to attract funding from the banks,” SN Tripathi, Union Additional Secretary and Development Commissioner, Ministry of MSME, said here today.
Speaking at the 7th National Conference on ‘MSME Financing and Strengthening MSME Linkages’ organised by the Indian Chamber of Commerce (ICC), Tripathi said “it is therefore very important for the new startups to ensure that they come up with good and viable proposals which have a lot of potential and future sustainability.”
Describing the MSME sector as backbone of India’s economic growth, Tripathi also highlighted the schemes and new policies introduced by the Centre to promote the MSME sector and new start-ups in the country.
The Credit Guarantee Fund Scheme for Micro and Small enterprises (CGTMSE) had already been launched with an objective to make credit available to Micro and Small Enterprises for loans upto Rs 100 lakh without collateral or third party guarantees, Tripathi said.
Stating that Indian banks prefer to give asset-based loan and not proposal-based funding to new businesses, Tripathi suggested to the banks to focus more on good proposals to encourage new businesses to come forward.
Talking about various schemes and support, he informed that the Centre has approved “Technology Centre Systems Programme (TCSP)”, under which 15 new technology centres would be developed and other existing centres would be upgraded.
To make the MSME sector more competitive, the ministry has given infrastructure assistance to develop clusters under the lean manufacturing scheme.
Also schemes have been introduced for training and research purposes to enhance competitiveness of the sector.