The Hindu Business Line : Call for more credit to micro, small units

Chennai, Nov. 22 The micro, small and medium enterprises sector is peeved over what it sees as “step-motherly treatment” by the Government and the RBI. The complaint mainly relates to the authorities not making specific measures to facilitating flow of credit to them.

According to Mr D.E. Ramakrishnan, President, Industrial and Financial Reconstruction Association for Small and Tiny Enterprises (IFRASTE), the micro and small enterprises “at the bottom of the pyramid” have not been getting credit and the authorities are not taking note of this.

He wants the RBI to take two specific measures to help the small industries – exemption to banks from standard provisioning of 0.25 per cent on loans they give to these industries and changing the NPA norms for this sector to ‘180 days overdue’ from ‘90 days overdue’. The first measure would make more bank funds available to the small companies. The second would allow banks to fund the companies even if interest is overdue from them for more than three months.

Noting that similar measures have been taken by the RBI in respect of other sectors, such as housing, Mr Ramakrishnan said the small industries also need and deserve support to help them tide over the current slowdown in the economy.

The alacrity with which the Government infused liquidity into the system more particularly for easing the redemption pressures of the mutual funds has not been shown to the MSEs, Mr Ramakrishnan, who is also a Member of the National Board for Micro, Small and Medium Enterprises, Ministry of MSME, told Business Line.

He points out that SIDBI had asked for Rs 10,000 crore for on-lending to MSEs; but then what has been available is “a paltry Rs 2,000 crore”, he says.

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