The Micro, Small and Medium Enterprises (MSME) Ministry will hold consultations with heads of various banks on Monday to persuade them to improve credit flow to the small industries.
"I have called a meeting of CMDs of various banks, including State Bank of India, United Bank of India and Canara Bank, on Monday to discuss with them the difficulties they are facing in financing to small units," Minister of State (Independent Charge) for Micro, Small and Medium Enterprises K H Muniyappa said at an Assocham event here.
"We want to sort out these issues and ensure that the sector gets easier access to credit, he added.
To ensure enhanced credit flow, the Prime Minister's Task Force on MSMEs had recommended 20% year-on-year growth in credit to micro and small enterprises (MSEs).
The Minister said although the RBI has guidelines on providing credit to the sector, it should ask banks to be a little liberal in giving loans to the industry as it is paramount to the growth of any small business.
On MSMEs' share in the country's total exports, Muniyappa said, "Last year, the sector's contribution to India's total exports was 40%, but this year it has declined to 36%, mainly due to weak demand in global markets. Now, we are trying to increase the share beyond 50%."
"For this, the government and banks together have to support the sector," he added.
The sector contributes over 8% to the country's Gross Domestic Product (GDP) and accounts for 45% of the manufacturing sector. There are around 3.6 crore such enterprises, employing over 8 crore people.
In the 12th Five-Year Plan, the Budget allocation for the sector has been more than doubled to Rs 24,000 crore from Rs 11,000 crore in the last plan period.
