Collateral-free lending to MSMEs need of the hour: MSME Secy Das

The Union MSME Secretary is in favour of more focus on collateral-free lending to micro and small enterprises. The MSME ministry at the centre is working hard for MSMEs to grow and flourish.

Talking to Bizz Buzz, Subhas Chandra Lal Das, Secretary, Ministry of MSME, said, “There should be greater focus on collateral-free lending to micro and small enterprises.”

He said that the ministry is committed to create a strong and enabling ecosystem for MSME to grow and flourish. He emphasized on innovative offerings of ministry woven around growth with sustainability. Das highlighted the increased coordination among different ministries for effective implementation of Central schemes such as PM Vishwakarma. He also mentioned that Ministry is geared up to introduce new schemes to catalyse green investment and contribute to National Determined Contributions (NDCs) of India.

Prior to it while addressing an event in New Delhi, he appreciated the increasing contribution of SIDBI and suggested called upon that Environment, Social and Governance (ESG) aspects need to be embedded and mainstreamed in entire enterprise lending.

SIDBI, organised an outreach programme "MSME and startup stakeholder consultation meet" on November 21, at Gurugram, Haryana. The program witnessed participation of more than 350 startups, MSMEs, lead industry association and rating agencies and other enablers serving the MSME ecosystem.

Apart from Das, the event was also attended by Vivek Joshi (IAS), Secretary, DFS, Ministry of Finance. The event commenced with Manthan session wherein Lead Industry Associations shared their perspectives to ease access to credit and non-financial services by MSMEs. Associations recounted the exemplary service of SIDBI especially the turnaround in last few years in terms of responsiveness, embracing digitization (leading to reduced TAT) and minimizing procedures and processes thus enabling entry of last mile into SIDBI folds. Rajive Chawla, Rakesh Chhabra, and JP Malhotra represented the MSME voice.

Nishant Kumar Yadav, Dy Commissioner, Gurugram addressed the gathering and assured the continuity of the support from State authorities. Yadav mentioned that the enterprising people of Gurugram have established their mettle in different sectors and the momentum should continue.

Sivasubramanian Ramann, CMD, SIDBI said that the presence of Secretary, DFS and Secretary, MSME reflects government’s commitment to strengthen MSMEs, the second largest contributor to the country’s economy and employment. Ramann mentioned that our thrust has been on ‘digitization’ and ‘greening the enterprise ecosystem’. SIDBI has been assessing the demand supply side gap and have provisioned for financial and non-financial services to address these. Ramann mentioned that SIDBI values the feedback and inputs of Industry Associations which helps to become more responsive.

Ramann mentioned that SIDBI has been working on digitizing the registration of MSMEs, access to finance by them as also leveraging GST data for democratizing credit access. Ramann mentioned that in line with expectation of GoI that SIDBI should evolve as largest direct lender to MSMEs, SIDBI has strategized, the ABC approach. It includes App based, Branch based and Co-partners based lending.

Vivek Joshi, Secretary, Ministry of Finance, advocated the significance of MSME sector in the Indian economy and reaffirmed government’s commitment towards development and growth of MSME sector.

Joshi also acknowledged the instrumental role played by SIDBI in strengthening the credit flow to MSMEs particularly through digitization, credit guarantee, channelizing ECLGS (as a Covid relief). Joshi also highlighted the thrust of Centre on reaching the last mile through banking and digital tools. He also recounted how banks have been proactively engaged for reaching street vendors under PMSVANidhi and also PMVishwakarma to provide end to end holistic support to Artisans.

Joshi appreciated the exhibition which reflects increasing orientation and demand towards net zero journey of the country. He called upon entrepreneurs to avail services such as express loan by SIDBI, look at e mobility as preferred mode of transport, etc. While appreciating SIDBI’s role, Joshi laid expectations for tripling SIDBI’s footprints. MSME Ministry and DFS would continue to extend whole-hearted support to boost the MSME ecosystem particularly those at bottom of pyramid, he said.

The dignitaries raised the happiness quotient of participants by flagging off EVs supported by SIDBI for delivering services in NCR under its 50KEV4ECO program. Vivek Joshi and SCL Das handed over sanctioned letter to 8 startups/MSMEs extending support under SIDBI’s digital journey, 4E scheme, speed and venture debt. Under 50KEV4ECO program, sanction letter was handed over to electric mobility as a service provider as also disbursement cheque was handed over to ‘cKers Finance’ to support acquisition of commercial EVs at competitive rate to create the market. Cumulative sanction of Rs 57 crore was handed over to the startups, MSMEs anmd NBFCs on the occasion.