Govt to include non-scheduled urban, district co-op banks in 3 schemes for MSMEs

The Centre has decided to include non-scheduled urban and district central cooperative banks in three big ticket schemes to facilitate access to finance for the MSME sector.

These schemes include the credit guarantee fund trust for micro and small enterprises, credit linked capital subsidy scheme and interest subvention.

The initiative is expected to expand the outreach of the schemes considerably which in turn shall help address the crucial requirement of access to finance of the MSME sector.

"The NBFCs have about 13 per cent share in MSME lending, and extend hassle-free credit to MSME sector, especially in the remote areas. The inclusion of NBFCs, scheduled and non-scheduled urban cooperative banks and district central cooperative banks in these schemes will spread the outreach and easy access of credit," Union MSME Minister Nitin Gadkari told PTI.

He said the step will also create uniformity and competitiveness across lenders in the financial sector, as the borrower will have the option to choose the lender in accordance with their convenience and approach.

"These schemes have been serving the sector but there was a need to take them to next level. Therefore, the ministry has decided to include the non-scheduled urban cooperative banks and district central cooperative banks in the the credit guarantee fund trust for micro and small enterprises; credit linked capital subsidy scheme; and interest subvention scheme," Gadkari said.