The National Small Industries Corporation (NSIC) has signed a pact with State Bank of India for providing affordable and easy credit to small-and- medium-sized units.
New Delhi: The National Small Industries Corporation (NSIC) has signed a pact with State Bank of India for providing affordable and easy credit to small-and- medium-sized units.
NSIC also has such agreements with various banks such as YES Bank, HSBC, Axis Bank, Union Bank of India and Central Bank of India.
"Recently, we have signed an agreement with SBI to facilitate easy credit to MSMEs at a reasonable rate and we hope it will really help these units," Chairman-cum-Managing Director of NSIC H P Kumar said.
He was speaking to reporters after the Memorandum of Understanding (MoU) signing ceremony between NSIC and Mauritius-based Small and Medium Enterprise Development Authority (SMEDA).
More and more banks are willing to sign similar agreements with NSIC as they want Micro, Small and Medium Enterprises (MSMEs) to be their customers, Kumar said.
Most of these enterprises 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," Kumar said.
Also, the MSME Ministry has been meeting various banks to persuade them to improve flow of credit to the small sector.
The Prime Minister's Task Force on MSMEs had recommended 20 percent year-on-year growth in credit to MSEs to ensure enhanced credit flow. However, most of these units still face problems in getting easy access to finance.
Meanwhile, NSIC presented a dividend cheque of Rs 12.47 crore to the its administrative ministry, the Ministry of MSME, for the 2012-13 fiscal. In 2011-12, the Corporation had given a dividend cheque of Rs 8.24 crore to the government.
"This year, it is the seventh consecutive year of the Corporation to pay dividend to the government," Kumar said.
NSIC said it has crossed a turnover of Rs 13,901 crore during 2012-13, recording a growth of 24 percent over the previous year.
The Corporation is engaged in promotion, assistance and fostering the growth of MSMEs in the country. It provides technology, marketing and financial support services to such units.
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.