Credit and Finance for MSMEs: In the latest move to boost MSME sector in India, the Central govt is mulling contributing 10% of funds to the small companies looking to raise equity capital by venturing into capital markets.
Credit and Finance for MSMEs: In the latest move to boost MSME sector in India, the Central govt is mulling contributing 10% of funds to the small companies looking to raise equity capital by venturing into capital markets, Union minister Nitin Gadkari said on Tuesday. “We have sent a proposal to the finance ministry so that MSMEs can raise money just like large companies,” Nitin Gadkari said at 16th Global SME Summit in Delhi. The government is also looking at resolving the funding issue for MSMEs and has been in constant touch with global financial organisations like BRICS to secure finances for Indian MSMEs, he added.
As raising funds remain one of the biggest hindrances in MSME growth, the government regularly announces ways to bolster the segment. Among other announcements, the government also said that disbursals under the earlier announced 59-minute loan scheme to MSMEs are also under review. The government had launched the 59-minute loan scheme late last year along with 11 other schemes to boost the segment. Earlier, in September 2019, the government launched the updated Credit linked Capital Subsidy Scheme (CLCSS) to allow micro, small and medium enterprises (MSMEs) access to capital.
A micro, small and medium enterprise (MSME) promotion body also recently announced that it will help small businesses to secure credit from SBI, National Small Industries Corporation (NSIC) under the Ministry of MSME told Financial Express Online in August.
Meanwhile, in another major relief to the MSME sector units under debt, Finance Minister Nirmala Sitharaman recently announced that banks cannot declare any stressed loan account of MSMEs as NPA till March next year. The Finance Minister also asked banks to work on recasting their debt. She added that the same has been announced keeping in mind the benefit of MSMEs.
India has approximately 6.3 crore MSMEs (as per government data till January 2019). These MSMEs contribute to 45% of India’s manufacturing sector and nearly 31 per cent to the services sector, and collectively provide jobs to over 110 million Indians.