Sidbi concerned over possible rise in NPAs

Small Industries Development Bank of India (Sidbi) has expressed concern over possible rise in Non Performing Assets (NPA) in current financial year following a general slowdown in the global economy and rising interest rates.

“Our NPAs may increase a bit with some sectors facing problems due to the slowdown,” Sidbi CMD Sushil Muhnot told Business Standard here.

However, he added the impact would not be significant, since the domestic demand remained buoyant as ever and the interest rates have already peaked.

“We are working with the union finance ministry to launch schemes for units, which are facing such troubles,” he informed.

Sidbi, which is the principal re-finance institution for Micro, Small and Medium Enterprises (MSME), is eyeing 20-22 per cent growth in its refinance portfolio in the fiscal.

Meanwhile, Sidbi has collaborated with a leading MSME body in Uttar Pradesh for meeting the capital expenditure needs of the sector.

UP is home to over three million MSMEs contributing about 60 per cent to the state industrial output and providing employment to five million people. It accounts for about eight per cent of the Gross State Domestic Product (GSDP).

The agreement with Indian Industries Association (IIA) would enable entrepreneurs get up to Rs 50 lakh loan from Sidbi without any collateral, repayable in 60 months with three month’s moratorium.

“Sidbi is working with lots of channel partners to reach out to entrepreneurs and the association with IIA would help us reach out to the right people for their financing needs,” Muhnot said.

UP ranks first in terms of number and amount of guarantee covered under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). Against the all India guarantee of Rs 30,000 crore under the scheme, UP accounts for over Rs 3,200 crore. Besides, the number of units covered in the state is about 95,000, which is 15 per cent of the national figure of 6,50,000.