Government keen to increase credit availability to MSMEs, says official

The government wants to increase credit availability to micro, small and medium enterprises (MSMEs) and also improve them by enhancing technology, an official said on Friday.

Addressing CII's Annual General Meeting, Rajneesh, Additional Secretary and Development Commissioner, Ministry of MSME said India is the fourth largest economy today and would be the third-largest soon.

Rajneesh highlighted how MSMEs took a hit during COVID-19 but turned around very fast.

He said that MSMEs provide employment to 27 crore people and that is why the ministry keeps them in mind while making policies.

"We want to increase credit availability to MSMEs. This year Budget provided for providing credit cards to micro enterprises," he said adding MSME NPAs (bad loans) were less than 5 per cent in last five years as per RBI data.

He also highlighted the role of technology to improve MSMEs, suggesting that through use of technology issues between environment concerns and growth aspirations can be resolved.

Sunil Mathur, Managing Director and CEO of Siemens Ltd said, today average productivity level is 75 per cent in India whereas it is over 90 per cent in Europe and use of technology can help bridge this gap (productivity). He pointed that Indian MSMEs are dealing with challenges like access to market and finance.

Shreekant Somany, CMD Somany Ceramics said digitisation helps MSMEs reduce cost and improve operational efficiency and suggested that MSMEs find new ways for rating them properly so that they get required financial facilities.

"We must support MSME innovation hubs for improving quality of products to meet global standards," he said opining that regulatory compliance burden is heavy on MSMEs.

Deepak Jain, Chairman Lumax Group said MSMEs represent the true entrepreneurship spirit of India.

"We need to have very collaborative ecosystem... today ecosystems compete with each other, " he said citing example of China competing with other ecosystems globally. He stressed on the need to support MSMEs saying that supporting MSMEs should be a national competitive strategy.