MSME Association CIMSME partners with two banks to vet their MSME loan applications | The Financial Express

MSME Association CIMSME partners with two banks to vet their MSME loan applications

Ease of Doing Business for MSMEs: According to the MoU, CIMSME will be responsible to do the due diligence of the loan applications which will then be shared with the banks. However, the final decision for sanction or rejection of the proposal will vest with the respective bank.

MSME Association CIMSME partners with two banks to vet their MSME loan applications
From left to right: Vikram Singh, Advisor, CIMSME; Subhash Joinwal, Former CGM, State Bank of India; Mukesh Mohan Gupta, President, CIMSME; Chander Mohan Minocha, Chief General Manager, MSME and Small Corporate Vertical, Union Bank of India; Arun Kumar, GM MSME, Union Bank of India; Sunil Ahuja, Deputy GM MSME, Union Bank of India

Ease of Doing Business for MSMEs: The Delhi-based MSME Association, Chamber of Indian Micro, Small and Medium Enterprise (CIMSME) signed two Memoranda of Understanding (MOUs) with Central Bank of India and Union Bank of India on Tuesday.

The MOUs were signed in the presence of Mukesh Mohan Gupta, President, CIMSME along with Y. Anil Kumar, General Manager MSME Lending and Fintech, Central Bank of India; Chander Mohan Minocha, Chief General Manager MSME and Small Corporate Vertical, Union Bank of India; Arun Kumar, General Manager MSME, Union Bank of India amongst other officials from the bank and the industry association.

“It’s the first initiative of its kind to promote and support the MSME sector jointly by the banks and the Chamber of Indian MSME,” Gupta told FEAspire.

Commenting on the MoU, Gupta added that CIMSME will be responsible to do the due diligence of the loan applications which will then be shared with the banks. However, the final decision for sanction or rejection of the proposal will vest with the respective bank.

Also Read: SMEs struggle most with digital marketing, order management, payments in online sales: BCG survey

In addition to vetting loan applications, CIMSME will also handhold the MSMEs for duly filling up the application form and completing the necessary formalities.

He explained that loan applications are often rejected for very basic reasons by banks. Many times, the application form is incomplete where the financials are not filled up properly, or certain financial documents are amiss or are shared piecemeal, if at all. Exorbitant projections of the sale turnover in comparison to the current sales figure is another common cause for loan application rejection.

“The rationale behind this partnership is to support the MSME sector with better access to structured financing as the banks will be confident that the proposal is received through a proper channel which is duly vetted and prima facie is in order,” said Gupta.

CIMSME is also in the process to sign similar MOUs with other public sector and private banks.

Also Read: Account aggregator framework: MSMEs want value-added services in return for sharing data, says survey 

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First published on: 02-11-2022 at 21:08 IST