MSMEs seek Rs 7,000 cr for restructuring loans

Hit hard by demand contraction, the small and medium units have asked banks to reschedule their loans worth Rs 7,000 crore.

"...The volume of loans for rescheduling runs to an estimated Rs 7,000 crore," Secretary in the Ministry of Micro, Small and Medium Enterprises (MSME) Dinesh Rai told PTI.

The loan amount for restructuring is likely to go up further with four more days left for receiving the rescheduling requests from MSMEs.

The Reserve Bank of India had allowed the banks to accept requests for restructuring of loans to MSMEs till March 31. The move is aimed to prevent the loans from becoming non-performing assets.

Including the informal sector, there are about 1.3 crore MSMEs, which contribute 8-9 per cent of the country's gross domestic product (GDP) and 45 per cent of the total manufacturing sector.

MSMEs have been complaining to the government that banks are reluctant to provide credit to them.