In­dian Banks told to be sen­si­tive to needs of MSMEs

The Pak Banker - - COMPANIES/BOSS -

Lend­ing to mi­cro, small and medium en­ter­prises (MSMEs) is backed by a strong busi­ness case, ac­cord­ing to Re­serve Bank of In­dia (RBI) Deputy Gover­nor S. S. Mun­dra.

He was ad­dress­ing a gath­er­ing of bankers at the Col­lege of Agri­cul­tural Bank­ing, Pune, on Fri­day while launch­ing a na­tional RBI-spon­sored pro­gramme to up­skill bank­ing of­fi­cials who deal with MSMEs, the Na­tional Mis­sion for Ca­pac­ity Build­ing of Bankers for Fi­nanc­ing MSME Sec­tor (NAMCABS).

MSMEs are cru­cial to the coun­try's econ­omy, con­tribut­ing some 45 per cent of man­u­fac­tur­ing out­put, 40 per cent of ex­ports and al­most 8 per cent of GDP. The sec­tor con­sists of just 47 mil­lion en­ter­prises and em­ploys about 106 mil­lion peo­ple.

Mr. Mun­dra urged bankers to be sen­si­tive to the life­cy­cle needs of MSMEs and de­velop in­no­va­tive prod­ucts to suit these clients' unique sea­sonal work­ing cap­i­tal and cap­i­tal ex­pen­di­ture re­quire­ments. The gov­ern­ment and RBI were al­ready nur­tur­ing the sec­tor by re­ha­bil­i­tat­ing sick MSMEs and through the Trade Re­ceiv­ables Dis­count­ing Sys­tem (TReDS), a sys­tem to help MSMEs con­vert their trade re­ceiv­ables, or goods de­liv­ered but not paid for into cash, ac­cord­ing to Mr. Mun­dra.

"A par­a­digm shift in fi­nanc­ing of Mi­cro, Small and Medium En­ter­prises (MSMEs) will also hap­pen as and when new small fi­nance banks are li­censed. These will make the fi­nanc­ing of MSMEs more com­pet­i­tive in the com­ing days. Banks will be able to face this com­pe­ti­tion only if they are more sen­si­tive to the needs of the small en­trepreneurs," Mr. Mun­dra said. The seminar was at­tended by rep­re­sen­ta­tives of 31 public, pri­vate and for­eign banks. Ac­cord­ing to the RBI, some 3 lakh per­son­nel have joined the bank­ing sys­tem in the last six years and it is likely that they have very lim­ited ex­po­sure to MSMEs.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.