Orissa govt lends helping hand to MSMEs

In order to build a corpus that will provide financial assistance to new Micro, Small and Medium Enterprises (MSMEs) in the form of equity and quasi-equity, the Orissa government is working on a MSME Venture Capital scheme.

The proposed scheme will provide seed money and margin money assistance to new small and medium enterprises (SMEs). The state government will provide some funds for the corpus, and invite other banks and financial institutions like the Small Industries Development Bank of India (SIDBI) to also contribute to it.

The government-owned lender, the Orissa State Financial Corporation (OSFC), is working out details of the scheme and it will be sent for approval of the state government soon, sources said.

Under the scheme, new and innovative MSMEs planning to set up their units will be required to apply for assistance to the proposed corpus with their project reports.

Eligible units will be provided some equity and soft loans at a subsidised rate of interest after due appraisal.

Depending on the size of the equity and soft loan provided from the corpus of the venture capital fund, other banks and financial institutions will give loans to the units concerned.

Sources said the MSME Venture Capital Scheme is likely to help promote new entrepreneurs, technologies and innovations. Under the scheme, MSMEs that win orders from any organisation can avail of raw material on credit from the state-owned Orissa Small Industries Corporation (OSIC), which will recover its money from the organisation placing orders with the MSMEs.