Government Sops for SMEs Welcomed by Entrepreneurs

  • Relaxation in Lending Limits upto 6% for Micro Enterprises.
  • Credit Monitoring Cell to Monitor Credit Related Issues.
  • Specialized Training in Export Management for SMEs.

New Delhi, 31 August 2009: Micro, Small and Medium Enterprises (MSMEs) in India now have reason to feel upbeat, if some recent steps taken by the Government of India are to go by. In order to boost MSME productivity and encourage exports, the government is reportedly considering a hike in the sub-limit within priority sector lending for the micro sector, from 4.9 per cent to 6 per cent. To top it, a credit monitoring cell is also being set up to resolve issues that MSMEs face in their dealings with banks.

The government has also decided to start a specially designed training course on export management in order to educate SMEs on various domains like institutional set-up for export promotion, export trade correspondence, export incentives, INCOTERMS export documentation, export finance/credit, export credit guarantee scheme/policies etc.

The relaxation in lending limits will help an additional funding of Rs 17,000 crore for the MSME sector, according to estimates by the Federation of Indian Small and Medium Enterprises (FISME). On the other hand, the credit monitoring cell would step in to resolve pending cases which have not been resolved by the bank within 14 days.

“The government’s latest decisions have been longstanding demands of the SME sector. Getting help has always been a complicated process and remained a big entry barrier for the not-too-savvy small entrepreneur. These decisions come as welcome developments for all SMEs. I am sure, this will not just boost the SME sector’s growth, but will also provide fresh impetus to small entrepreneurs to explore more efficient ways of contributing to the nation’s economy”, says Dinesh Agarwal, CEO and Founder of IndiaMART.com.

“IndiaMART.com has always been an activist and evangelist in pushing for a better deal for SMEs. These developments only vindicate the efforts made by Mr. Dinesh Agarwal to help us grow,” said an upbeat Mr. Manish Kumar, CEO of Madhulika Online, Dhanbad. Parikh Packaging Pvt Ltd, which has been an SME for the last 5 years, “SMEs are seldom heard by the government because we are too small. IndiaMART has been our voice in front of the government, and we are glad that the government has woken up and started looking at the SME sector with a proactive policy.” He concluded.