Rajan for technology use to reach out to MSMEs

New Delhi, Dec 11 (KNN) Reserve Bank of India (RBI) Governor Raghuram Rajan today said that technology must be leveraged to improve access of the MSME sector to bank finance.

“We need to expand access of finance to the MSME sector through new technologies,” he said emphasizing the need to improve financial inclusions.

Speaking at the Delhi Economic Conclave 2013 on ‘The Agenda for the Next Five Years’ here, he also said the RBI would introduce measures to improve liquidity.

Rajan’s observations are significant, as the MSME sector faces a huge shortfall in its credit demand.

According to the RBI projections, there is a huge 56 per cent gap between demand and supply of bank credit for the MSME sector in the fiscal 2013-14.

The estimated outstanding credit demand and supply gap of MSMEs will be 56 per cent in 2013-14 at Rs 15,66,089 crore, according to the report of the Private Sector Investment for MSME Sub Group under Working Group for the 12th Five Year Plan (2012-2017).

The focus of the RBI remains on inflation, the Central Bank Governor said adding growth seems to be stabilising, although it was too early to call a bottom.

"Our effort is firmly on controlling inflation," Rajan said during his speech at the conclave organised by the Finance Ministry.

Rajan added the rupee had stabilised "somewhat", but said there was no room for complacency. He also called on the government to continue its efforts to contain the fiscal deficit and said raising subsidised diesel prices to market levels would help.

Delays in putting large, stalled projects back on track or an additional fiscal slippage would only amplify the challenges that the new government will face, he added.

“We are seeing some glimmerings of stronger growth. But it’s too early to say we have certainly hit bottom. But I am hopeful that (growth) would be around 5 per cent.”

The apex bank chief also emphasized on skill development and job oriented trainings and education and said that there is also a need for good plumbers and good electricians in the country.