Provide Easy Finance to MSME Sector: Etela Urges Banks
HYDERABAD: The Federation of Telangana and Andhra PradeshA�Chambers of Commerce and Industry (FTAPCCI) in association with Central Bank of India, SIDBI and State Bank of Hyderabad organized a bankera��s conclave onA�a�?Financial Opportunities for MSME Sector today at FTAPCCI here.
Etela Rajender, Telangana finance minister, was the chief guest on the occasion. In his speech, Etela congratulated FTAPCCI and all the banks, particularly Central Bank of India, SIDBI, SBH for taking the initiative and organizing this bankera��s conclave.
Financial opportunities for MSMEs (Micro Small and Medium Enterprises) are a widely discussed topic for very long without much improvement in the access to finance for MSME sector.A� Everyone in the government, the bankers, the policy makers, the industry, and all the stakeholders recognized the importance of MSME sector in the socio-economic development of the country, but little was done to improve the most crucial input for the growth of MSMEs, both in quantitative and qualitative terms, that is Finance, Etela said.
Though MSMEs account for significant share of employment and GDP, when they have limited access to finance, the economy suffersA�negative consequences, such as economic and social opportunities are restricted, enterprise creation and growth are restrained, households and enterprises are more vulnerable to threats, and payments are costlier and less safe.
Access to finance is disproportionately difficult for smaller firms in the least developed countries (LDCs), with 41 percent of SMEs in LDCs reporting access to finance as a major constraint to their growth and development, by comparison to 30 percent in middle-income countries (MICs) and only 15 percent in high-income countries (HICs), he pointed out.
Etela said that today small and medium units want easy finance from the banks at lower interest rates and low-cost lands.A� The initial capital cost while running the industry should be reduced if we really want to make the MSMEs successful. MSMEs get loans from banks at higher interest rates of around 14 percent, and it involves lot of documentation.
He said the results for the growth of MSMEs would be very positive if the state government works on two factors – providing land at minimum rate and providing finance at lowest interest rates.
The State has introduced incentives for the MSMEs, but they have to make vast documentation to avail the schemes, he said, hence, there is a need to make the process simplified.
a�?Our government has evolved a new strategy to improve the availability of finance to small units. It is mandatory for mega projects in core sectors to set aside a portion of the activity for MSME if they want to access the incentivesa�?, he added..
Pradeep Chandra,A�special chief secretary, Government of A�Telangana,A�Shiv Kumar Rungta, president, FTAPCCI, Krishna Mohan, principal chief general manager and banking ombudsman, Andhra Pradesh & Telangana,A�Murthy, MD, APSFC,A�Gowra Srinivas, chairman, banking, financeA�& insuranceA�committee,A�were among those who spoke. (NSS)