NSIC may soon sign pact with SBI for cheap loans to MSMEs
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NSIC may soon sign pact with SBI for cheap loans to MSMEs

Last Updated: Sunday, June 30, 2013, 11:52
 
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NSIC may soon sign pact with SBI for cheap loans to MSMEs
New Delhi: The National Small Industries Corporation (NSIC) may soon sign a pact with State Bank of India for providing affordable and easy credit to small-and- medium-sized units.

NSIC at present has such pacts with various banks, including YES Bank, HSBC, Axis Bank, Union Bank of India and Central Bank of India.

"The talks to sign the agreement with SBI are in final stage. Now, any day we would sign it (the pact)," NSIC Chairman-cum-Managing Director H P Kumar told PTI.

More and more banks are willing to sign similar pacts as they want MSMEs to be their customers, he said.
Most of the MSMEs face credit crunch as they fail to fulfill collateral requirements and have limited access to equity capital.

"We are also trying to sign this pact with the remaining banks so that small units get easy credit flow in every part of the country," he added.

Also, the Micro, Small and Medium Enterprises (MSME) Ministry is in the process of holding consultations with various banks to persuade them to improve flow of credit to small sector.

The Prime Minister's Task Force on MSMEs had recommended 20 percent year-on-year growth in credit to micro and small enterprises to ensure enhanced credit flow.

However, most of these units still face problems in getting easy access to finance.

The Corporation is helping the units in getting credit ratings from firms like Crisil and Fitch, Kumar said.

The rating helps them in getting loans at concessional rates, he said, adding that in 2013-14 fiscal, NSIC would assist over 20,000 MSMEs to get the ratings.

In the last fiscal, 19,676 units got ratings. NSIC provides coal, steel and aluminium to small firms at bulk discount rates.

The MSME sector contributes 8 percent to India's Gross Domestic Product (GDP), its share in the country's total exports is 36 percent and contributes 45 percent to the manufactured output.

The sector provides employment to over 8 crore people engaged in over 3.6 crore units, producing more than 6,000 products.

PTI



First Published: Sunday, June 30, 2013, 11:52


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