Representatives of micro, small and medium enterprises (MSMEs) on Tuesday raised concerns over high interest rates, delays in loan disbursal and banks insistence on collateral for working loans in a meeting with finance minister Nirmala Sitharaman. “MSMEs have demanded a differential interest rate for the sector. Issues related to working capital and Goods and Service Tax (GST) were also brought up,” a government official said after the meeting.
Earlier in the day, transport and MSME minister NitinGadkari said the MSME sector creates 113 million jobs and the government is giving highest priority to resolve its problems. “The problem with the 59 minutes (loan scheme) is that banks immediately sanction the loan but it is delayed for disbursement. Today, we have recommended to the banking secretary to find out the reasons for delayed disbursements,” Gadkari said. On Monday, the government had asked banks to extend the ‘psbloanin59minutes’ scheme to the retail sector as well. Also, the scope of the scheme is being expanded to increase the coverage to Rs. 5 crore from Rs. 1 crore.
Another official aware of the developments said Sitharaman pointed out that the industry should create a platform for MSMEs to be visible to the rest of the world. She added that there is no platform to get in touch with MSMEs if somebody wants to buy something from them. “FM advised that the industry should take it upon itself to create one such platform or database of sorts,” he said. Sitharaman had met officials of public and private sector banks on Monday and the government is seeking suggestions from the industry on ways to revive the economy.
