Small and micro units not enthused with credit scheme

The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE), which guarantees collateral-free bank credit for micro and small enterprises, has failed to enthuse the small units in the region.

Majority of proprietors in the manufacturing sector in the region allege, despite the scheme guaranteeing collateral-free loan up to Rs 100 lakhs, banks were not lending without collaterals.

This is despite the fact that data collected from banks show surge in coverage under the CGTMSE scheme both for Punjab and Haryana region for the first half of 2010 ended September 10 compared to the corresponding period in 2009.

Haryana Chamber of Commerce and Industry General Secretary A L Aggarwal said, the banks in the region weren’t following the policy of lending collateral-free loans. Although the quantum of amount sanctioned under the scheme has gone up but that doesn’t align with the number of units in the region.

 

The CGTMSE scheme set up by the Ministry of Micro, Small and Medium Enterprises, Central government and Small Industries Development Bank of India in 2000 aimed at providing collateral-free loan for small and micro enterprises.

Availability of bank credit without the hassles of collaterals / third party guarantees would be a major source of support to the first generation entrepreneurs to realise their dream of setting up a unit of their own.

Joint Forum of Chamber of Chandigarh industries and Industry association of Chandigarh Convener Vinod Mittal maintained, the banks were reluctant to sanction their proposals without demanding collaterals.