Speaking about the fund, Vivek Rae, Secretary, Ministry of MSME, stated that the fund will be worth Rs. 5,000 crore. “To begin with, a corpus of Rs. 500 crore would be set aside for the fund, of which the government would put in Rs. 100 crore, while the balance would be contributed by banks and financial institutions. The scheme, which would be operationalized within three months, would take equity stake in companies at the bottom of the pyramid and promote venture capital among MSMEs,” Rae said, while inaugurating CII’s Conclave on Credit and Finance for MSMEs in the national capital.
NK Maini, Deputy Managing Director, SIDBI, spoke about an existing gap of about Rs. 7 trillion in MSME financing, as reported by the IFC Report. “It will be through both traditional and non-traditional modes of finance that the gap will be filled. SIDBI, as the apex financial institution for MSMEs, is committed to help bridge this gap,” Maini stated.
Expressing his concern, Rae said, “Despite detailed guidelines from RBI to banking institutions on dispersal of credit to MSMEs, these units face different behaviour and a sort of financial exclusion from the banking system. This is a big challenge for entrepreneurs who want to run their small businesses successfully. I would like to urge banks for an increase in the penetration of MSMEs in the banking system. There has to be a strong accountability towards assuring MSMEs utilization of credit.”
CK Mishra, Joint Secretary, Ministry of MSME, Government of India, highlighted the role of banks and rating agencies and reiterated the commitment of the Ministry of MSME for facilitating the availability of credit and finance for MSMEs. Mishra added, “It is very important for all stakeholders in the MSME sector to come together on a common platform. The bankers have to play a very important role in achieving this. Efficient implementation and monitoring of the existing guidelines shall improve the scenario for MSMEs.”
With regard to catering to the credit needs of Indian MSMEs, the National Stock Exchange (NSE) has also come up with a dedicated program. Ravi Tyagi, Head of SME Project, NSE, says, “I am confident that the SME platform will fulfil the long-pending need for raising equity finance for SMEs. However, it is very important for SMEs to have a clear understanding about raising funds through such schemes. I think, CII, along with NSE and SIDBI, can not only work towards streamlining the guidelines for this, but can also enhance the appeal of raising funds from the primary markets by the SMEs.”