*Representational Picture

The outstanding credit by Scheduled Commercial Banks (SCBs) to Micro, Small and Medium Enterprises (MSMEs) in Jharkhand was higher at Rs 10,897 crore in FY2017-18 as against Rs 8,192 crore in FY2016-17, a 33% rise.

 The number of MSME accounts that availed credit facility from the SCBs also went up from 2.36 lakh in 2016-17 to 2.42 lakh in 2017-18 in Jharkhand. Minister of Finance Smt. Nirmala Sitharaman furnished the detail in Rajya Sabha on June 25 while replying to questions raised by RS MP Shri Parimal Nathwani.

The minister stated that the following steps have been taken by Reserve Bank of India (RBI) and Government to ensure access of credit to MSMEs:

  • Advice to all SCBs to achieve a 20% year-on-year growth in credit to Micro and Small Enterprises (MSEs)
  • Allocation of 60% of the MSEs advances to the micro enterprise accounts
  • A 10% annual growth in number of micro enterprise accounts
  • Additional working capital limit to meet the requirements arising due to unforeseen/seasonal increase in demand
  • Adoption of one cluster and operationalising at least one specialised MSME Branch in every district
  • Simplified computation of working capital of MSE units to make it minimum 20% of the projected annual turnover of the unit for borrowal limits upto Rs5 crore
  • Setting up of Trade Receivables Discounting System (TReDS) to solve the problem of delayed payment of MSMEs.

Shri Parimal Nathwani wanted to know about the constrains faced by MSMEs in accessing credit facilities from institutional sources, the credit disbursed to MSMEs during the last three years and whether the banks are charging higher interest rates to MSMEs and if certain banks do not pass on the interest rate cuts to the MSME sector.

The minister’s statement also said that Government has received complaints / representations from time to time from MSMEs regarding constraints in accessing credit from institutional sources. These inter-alia, indicate, insistence on collateral, delayed sanctioning of credit, sanction of lower loan amount as against the required amount, charging of higher rate of interest, etc. 

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