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Credit rating for SMEs soon

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"The idea is to ensure timely and affordable credit to the SMEs."

New Delhi , April 27

SMALL Industries Development Bank of India (SIDBI) and the Government of India are taking a slew of initiatives to give a fillip to the small and medium sector. In this regard, SIDBI in conjunction with Punjab National Bank (PNB) and a few other institutions has proposed to set up a credit rating agency.

To be made operational within the next six months, the main purpose of this move would be to allay the fears of accountability (that the credit might turn out to be an NPA) currently prevailing in most of the banks.

This was disclosed by Mr V.K. Chopra, Chairman & MD of SIDBI, at the 20th annual session of FICCI Ladies Organisation (FLO) here on Tuesday.

He said, "The idea is to ensure timely and affordable credit to the SMEs." Mr Chopra further informed that SIDBI would also set up a national technology bank, which will be made operational in the next six months.

"It will lend technology support to the Small Scale Industries (SSI)," he added.

Elaborating further, he said that the technology bank would be a repository of all the latest technologies that are critical for the success of this sector.

On the recent Government announcement of an SME fund of Rs 10,000 crore, Mr Chopra said that the amount would be disbursed within a stipulated time frame of two years.

He added that to facilitate disbursement in areas where there are no SIDBI branches, a partnership has been forged with state finance corporations and commercial banks.

As part of the procedure the rate of interest on which credit will be given to the ultimate borrower will be 9.5 per cent, a little lower than the existing prime lending rate (PLR).

On micro crediting, Mr Chopra observed that these activities needed to be given a boost in the country.

He added that SIDBI was in the process of raising Rs 500 crore, which will go to five lakh beneficiaries in the next three years.

Mr Chopra gave away the outstanding woman professional award for the year 2002-03 to Dr (Ms) Seepana Padmaja Rao, Head, Seed Technology Division, Indian Grassland and Fodder Institute, Jhansi.

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