Credit and Finance for MSMEs: Rajya Sabha member from Gujarat and senior Congress leader Ahmed Patel on Wednesday met MSME minister Nitin Gadkari to stress on the situation of MSMEs in the state.
Credit and Finance for MSMEs: Rajya Sabha member from Gujarat and senior Congress leader Ahmed Patel on Wednesday met MSME minister Nitin Gadkari to stress on the situation of MSMEs in the state along with farmers compensation etc. Patel, in a letter sent to Gadkari on Tuesday, said that bad loans among MSMEs in the state increased by 23 per cent in Q1 FY20. “This rise in NPAs amongst small businesses is a clear manifestation of the economic slowdown,” Patel said in the letter. MSME bad loans in Gujarat increased from Rs 7,290 crore in Q1 FY19 to Rs 8,974 crore in Q1 2020, according to the State Level Bankers’ Committee report.
Patel also urged the minister to help MSMEs access loans under the 59-minute loan scheme launched last year in November for small businesses to give in-principle approval for a term loan or working capital loan up to Rs 1 crore. The amount was increased to Rs 5 crore in July this year. Highlighting the ‘worrisome’ credit situation in the state with respect to MSME finance, Patel said that in Gujarat over 70 per cent applications under the scheme fail to materialize. He tweeted the letter sent to Gadkari on Tuesday.
“It is important that the government takes concrete measures to assist MSMEs rather than announcements which make good headlines.” Overall NPA rates in micro and SME businesses in India have remained “range-bound between 8.5 per cent (in June 2018) to 8.7 per cent (June 2019) and 10.6 per cent (in both June 2018 and June 2019) respectively over last one year,” according to SIDBI MSME Pulse report.
Psbloansin59minutes.com — the portal got 2,00,660 loan applications while 1,59,583 were given in-principle approval since the launch of the portal and 1,33,448 applications were sanctioned, Anurag Thakur, minister of state for finance had informed the Rajya Sabha in July.
The Congress leader also asked Gadkari with an urgent need to expand the government’s MSME Cluster Development Programme to develop industrial clusters the state’s tribal areas. “MSME sector is the backbone of the Indian economy. The employment crisis and economic slowdown will not be solved unless we resolve the problem of small businesses,” Patel added.