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Banks Commit to Providing Credit to MSMEs: Muniyappa

 
Raj Narayan's picture
Tags: PSU Banks
Banks Commit to Providing Credit to MSMEs: Muniyappa
Representatives of more than 25 banks including State Bank of India, Canara Bank and United Bank were part of the meeting

New Delhi, December 10: Leading banks have assured the government that they would facilitate easy flow of credit to the micro, small and medium enterprises (MSME) under various existing schemes. 

Disclosing this, the Minister of State for MSMEs KH Muniyappa said during the meeting with heads of various banks, an assurance was taken about helping resolve the credit flow to MSMEs by implementing schemes such as the Credit Guarantee Scheme and the Prime Minister's Employment Generation program (PMEGP). 

Representatives of more than 25 banks including State Bank of India, Canara Bank and United Bank were part of the meeting. Under the PMEGP, urban and rural entrepreneurs in the general category can avail a subsidy of 15 per cent and 25 per cent on the project cost. In the case of weaker sections of society, a 25 per cent and 35 per cent subsidy is provided to urban and rural businessmen. 

"Timely implementation of these schemes would help in the overall growth of the sector," Muniyappa said. "Under PMEGP, the ministry has set a target to set up additional 5 lakh enterprises and create 40 lakh jobs in the 12th Plan," Muniyappa said, adding "We have instructed banks to achieve the year's target of 1 lakh cases before this month end, under PMEGP."

Since inception of PMEGP in 2008-09, around 2.21 lakh entreprises were set up which provided employment to 20.3 lakh people. The scheme is aimed at generating employment through setting up of micro enterprises, including rural industrial units.

While the credit guarantee scheme provides guarantee cover of up to 85 per cent on collateral free credit facility is extended by lending institutions to new and existing units for loans up to Rs 100 lakh. To review the progress, the ministry would convene a meeting of bankers in January, Muniyappa said. To ensure enhanced credit flow, the Prime Minister's Task Force on MSMEs had recommended 20 per cent year-on-year growth in credit to micro and small enterprises (MSMEs).