Credit flow to MSMEs to double in 5 yrs: PM

Prime Minister Manmohan Singh today announced that the government would take steps to double credit flow to micro, small and medium enterprises (MSME) in five years.

“Credit is the lifeline of any business and more so MSMEs. The government is committed to the cause of the sector and will double the flow of credit to MSMEs in 5 years,” he said after giving national awards to entrepreneurs in the sector. He also said that public sector banks increased lending to MSMEs by 25 per cent in 2008-09, a tough year for the sector due to economic slowdown.

The National awards felicitated a number of public sector banks for their support to MSMEs. State Bank of India and its subsidiaries received more than 3 awards for the various schemes they have launched to help the credit situation of MSMEs.

 

“Our lending to small enterprises increased by 26 per cent while that to medium enterprises increased by 23 per cent in the last fiscal and that is why we have been given this award. We expect our lending to the sector to increase by 25-30 per cent in the current fiscal,” said A Ramakrishnan , Chief general manager, state Bank of Mysore.

According to estimates MSMEs are given credit of about Rs 1,50,000 crore by PSUs per annum. The sector has around 2.60 crore units which contribute around 45 per cent of the country’s manufacturing output and 40 per cent to exports.

The Prime Minister also said that a task force will be set soon to look into the problems of the sector and will come out with its report in three months. The decision was taken in a meeting which the Prime Minister had with representatives of the MSME sector on August 26.