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The credit flow of banks to medium scale industries in Odisha has dropped by whopping 23.5 per cent in 2013-14 even as it grew by 29.2 per cent for micro and small enterprises.
“If we take bank finance as an indicator of growth in this segment, the credit flow to micro and small enterprises in Odisha has registered an increase of 29.2 per cent from Rs 13,789 crore to Rs 17, 810 crore during 2013-14, against an all India growth of 23.1 per cent. However, credit flow to medium scale industries registered a decline of 23.5 per cent to Rs 2616 crore with the opening of new accounts registering sharp decline of 66 per cent”, said KM Trivedi, Chief General Manager, State Bank of India(SBI), Bhubaneswar circle.
He was speaking at the 3rd edition of MSME Summit Cum Expo-2014 organised by Indian Chamber of Commerce (ICC).
On the slow growth of MSME sector in Odisha, he said, unrealistic projection in the project reports, unrelated expansion and excess capacity creation have caused the premature closing of many units in the state.
The bank official pointed out that lack of desired financial discipline, diversion of funds for consumption processes, buying properties or assets unrelated to the core activity instead of ploughing back of profits into the venture have adversely affected the growth of the sector.
The success rate of rehabilitation is also not encouraging and the share of MSME sector in the non-performing assets of the banks is also a matter of concern. These areas need immediate attention of all stake holders, he said.
In Odisha, SBI has extended loans to the tune of Rs 5871 crore to the SME sector. Under the CGTMSE (credit guarantee fund trust for micro and small enterprises) scheme of the Centre, loans have been provided to 22521 customers amounting to Rs 731 crore as on 31 March, 2014.
The PSU bank has identified three clusters in its recently launched initiative for cluster based financing in different geographical areas of the country. In Odisha, the bank has identified three clusters namely, foundry and engineering hub at Rourkela, sea food export units at Puri and Bhubaneswar and rice mills in Koraput and Sambalpur. “We are also in the process of identifying a few more clusters in the state to cater to the needs of the sector”, Trivedi said.
Speaking on the occasion, chief secretary, Gokul Chandra Pati suggested that professionals working in large industries should provide professional advice to the MSME sector.On the rising NPAs of banks, MSME secretary, Panchanan Das said that the entrepreneurs cannot be always blamed for it. Sometimes, the banks are also at fault, he added.
Vishal Agarwal, chairman, ICC Odisha Expert Committee and Chairman and Managing Director, VISA Steel Ltd, Nityananda Palai, Director of industries also spoke on the occasion.
