New Delhi: Credit flow to micro, small and
medium enterprises (MSMEs) has more than doubled in two years
to Rs 2.57 lakh crore in the financial year ending March 2009,
Reserve Bank of India deputy governor K C Chakrabarty said.
"So, Rs 1.27 lakh crore to Rs 2.57 lakh crore in two year
time as credit to MSME sector, still we are saying banks are
not giving credit," Chakrabarty said on Saturday at a conference on
finance availability for MSMEs by industry body CII.
Asking entrepreneurs to come up with viable projects that
can convince bank branch managers of repayment of the loan, he
said there is no shortage of funds and industrialists must
understand the difference between money and credit.
"Today, there is no bank in this country who will refuse
money. Every bank is sitting on tonnes of money ... As Reserve
Bank, I can tell you there is no dearth of credit," he said.
"Your problem is you don't require credit, you require
money," he said chidding those who fail to see 'credit has to
be self-liquidating on a viable project and has a cost'.
Banks should not be as aggressive as venture capitalists
and must do their own assessment before advancing loans
without depending on the credit rating agencies, he said.
However, emphasising the importance of the MSME sector,
he said no global company can do without them and the country
needs a robust MSME sector to grow at a rate of 10 percent
for the next 20 years.
Bureau Report
First Published: Saturday, October 10, 2009, 16:16