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LATEST NEWS UPDATES | Pain points for the MSME sector -B Yerram Raju

Pain points for the MSME sector -B Yerram Raju

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published Published on Dec 27, 2018   modified Modified on Dec 27, 2018
-The Hindu Business Line

The RBI has its task cut out as it sets about addressing the sector’s credit and viability concerns

A debate on MSMEs has come alive due to the Centre’s insistence on a regulatory reprieve for the beleaguered sector post GST and post demonetisation. The RBI at its last Board meeting that Urjit Patel chaired, promised to set up a Committee on the MSME sector by the end of this month.

There is an estimate, authenticated by the Centre, that there are around 50 million MSMEs, both registered and unregistered, employing 120 million, second only to agriculture.

Credit crunch

MSMEs contribute 6.11 per cent of manufacturing GDP and 24.6 per cent of services GDP. They also account for 16 per cent of bank lending. Around 8 per cent of credit to manufacturing micro and small enterprises and 13 per cent to medium enterprises are estimated to be gross NPAs.

MUDRA (Micro Units Development and Refinance Ageny) and the ‘59-minute loan sanction’ promises enhanced credit reach to the sector with SIDBI in the lead for both. MUDRA helped banks to push the services sector lending below Rs. 5 lakh significantly.

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The Hindu Business Line, 26 December, 2018, https://www.thehindubusinessline.com/opinion/pain-points-for-the-msme-sector/article25835822.ece?homepage=true&fbclid=IwAR048RiLMHJrbLmRlsKcw2WOrh3kZtZa


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