West Bengal eyes more help from SSI fund

The state of West Bengal, ranking seventh in the credit guarantee scheme list, managed to bag a guarantee cover of Rs 239.83 crore for 5376 individual cases under the CGTMSE fund, as on April 2008.

CGTMSE, is a special fund body was set up way back in 2000, by the Government of India and Small Industries Development Bank of India (SIDBI) in order to help the micro and small enterprises (MSEs)in India in availing easy finance from banks without a collateral guarantee and employment generation.

O S Vinod, chief executive officer, CGTMSE pointed out that in terms of number of cases covered , West Bengal accounted for more than 8.6 per cent of the total share covered by the CGTMSE fund annually.

Speaking to Business Standard, he pointed out that Orissa, a neighboring state to West Bengal has also got a similar guarantee cover for around 6525 cases as on April 2008 but the fund amount however was much lower comparatively at Rs 101.92 crore.

"There was chance for a healthy and positive growth in West Bengal's share this fiscal," he added.

West Bengal had around 28592 sick MSE's and accounted for more than 25 per cent of sick MSEs in the country.

States like Tamil Nadu, Maharashtra, Madhya Pradesh, uttar Pradesh, Bihar had many sick MSEs as well.

Different initiatives by different states and the central government to revive MSEs depended on help from public and private sector banks and such special trust organisations.

The number of sick units continued to be high indicating more help had to be made available.

Operating on a pan-indian basis, CGTMSE had more than 60 public and private sector banks as member lending institutions, with State Bank Of India claiming largest share.

CGTMSE mainly acted as the collateral guarantor to all MSE's referred to it by member lending institutions.

It made available collateral free credit to micro and small industries, as lack of funding and liquidity were some of the major hurdles for small entrepreneurs.

It also gave loan coverage of around 75 per cent for all loans amounting to more than Rs 5 lakh and 80 per cent for loans less than Rs 5 lakh.