TS to support MSME finance

Published on May 24, 2015 02:13:16 AM

Access to finance is still a major bottleneck to the Micro, Small & Medium Enterprises (MSMEs) and a large portion of banking support is still tilted towards the large corporations. Survival of MSMEs and ensuring sustainability of businesses at a time when there is no lending support from the banking sector poses several challenges, Etela Rajender, Finance and Planning minister, Government of Telangana, said, as part of his inaugural address at the Bankers Conclave on Financial Opportunities for MSME Sector’ being held here on May 23-24, 2015, organised by the Federation of Telangana and Andhra Pradesh Chambers of commerce and Industry (FTAPCCI).

He said, Telangana government is keen to support and encourage MSMEs. Not just large businesses need money for technology upgradation and improving quality, but MSMEs need the same to prosper their businesses. MSMEs should not be seen as providing ancillary role to major organisations, but should be provided with support to become large companies so that employment generation can happen on a large scale that too for local youth. MSMEs also are a key source for employing unskilled workforce providing them a platform to learn new skills.

Banks should constantly monitor if adequate funding is going to the MSME sector. Instead of following the traditional approach of looking at the appraisal documents and balance sheets, banks should evaluate the borrowers based on their intention and commitment to make a difference. “Mere paper works hasn’t helped the bankers much and we could not stop the impact of acts of people such as Harshad Mehta on the nation’s financial system,” he added.

Telangana government is also keen to help revive the public sector enterprises in the State. The plan includes giving second life to Nizam Sugars, Sirpur-Kagaznagar, and Ballarpur Industries’ Kamlapur factory to provide employment to those affected dues to closure of units in the past. The government also has plans to become power surplus in the coming years and intends to scale up power availability in the State from the current 4,000 MW to 24,000 MW by 2019. “With the efforts the government has made till date to ensure power supply, the demand for generators and inverters has fallen in the recent past,” he pointed out.

Shiv Kumar Rungta, president, FTAPCCI said, “Lack of availability of finances, not getting credit on time, high rate of interest, loans with collateral and limited access to the capital are some of the many financing issues faced by the MSMEs while seeking loan. Though the government and the RBI have powerful policies at their disposal, most of the banks still hesitate to lend loans to the MSMEs due to high risk factor involved.”

K Pradeep Chandra, special chief secretary for Finance, Government of Telangana; N Krishna Mohan, Banking Ombudsman, Hyderabad; Sandeep Choudary, CEO, Credit Guarantee Trust MSE, SIDBI Mumbai; Ravindra Modi, vice-president, FTAPCCI attended the conclave.