TANSTIA Calls for Strict Implementation of SME Financing Norms | SupportBiz

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TANSTIA Calls for Strict Implementation of SME Financing Norms

When it comes to MSME funding, the rule book is just a statement of the ideal, the words of which often go unread.

Why is the obvious so difficult to see?, fumes C.K. Mohan, Hon. General Secretary, TANSTIA as he spoke about the financial burdens of the small businesses. He thinks the MSMEs are perversely blamed for the current industrial slowdown.

In an exclusive interaction with SupportBiz, Mohan said there are about 42677 industry units declared as sick units until March 2013, of which only 1630 are identified as viable sick units, meaning the rest are termed unviable. “These figures popped up in a recent meeting with the bankers. I asked them if they think nearly 98% of SMEs are willful defaulters. How can small entrepreneurs be blamed responsible for the situation today? They are willing to work any amount. The world economy has come down, so the bankers cannot punish the small players. I think this is the time the lending institutions need to help SMEs deal with the crisis through adequate funding,” Mohan said.

It’s an open secret that despite so many regulations, our lending institutions blatantly refuse to fund SMEs without collaterals. TANSTIA president demands strict adherence to the lending norms. Banks should train their managers about the rules pertaining to MSME funding. “If a policy is framed, it should be followed accordingly,” he said.

Asserting that SMEs has nothing do with the economic situation today, Mohan said it’s high time the government look into matter. At a time when the market is flooded with Chinese products, Mohan has a point when he asked the authorities to look into the industry-friendly policies of our neighborhood. “The government should look into why Chinese players are able to manufacture products in such low rates. They have very clear industry friendly land laws (no investments required on land), subsidy elements, raw material availability and export oriented schemes,” he said.

At this crucial juncture of economic uncertainties, TANSTIA promises to do everything possible to keep the SMEs from sinking in the crisis. “Our immediate goal is to take those necessary actions to save the existing industries from closing down. The next is to increase the employable skilled labour,” Mohan said. Dissemination of right information is the core focus as the association looks to bridge that gap between the government and the entrepreneurs.

“We are getting into a big way in training and skill development with the government support. We already have an association with the TVS training school in Vanagaram where we have started a batch of motorcycle mechanics. The institution will train the candidates and offer them 100% job placement,” Mohan said. “This sort of training and placement activities will be expanded to other areas as well.”

TANSTIA also does a lot of consultations as it has around 800 consultants on board. The association, in corporation with IIT-Madras, has designed an innovation program, which is more into brining effective changes in policy designs rather than just R&D.