RBI invites banks, stakeholders to seminar on financing MSMEs

Pune, Jan 23 (KNN)  To explore new approaches, strategies as well as innovative ideas in providing access to MSMEs, the Reserve Bank of India (RBI) is organising a seminar on Financing Micro, Small and Medium Enterprises here.
 
Meant for banks and all stakeholders, the Seminar is scheduled to be held from February-17 to 18 at the College of Agricultural Banking (CAB) which is a certified training institute of RBI.
 
While acknowledging the fact that micro and small enterprises (MSE) are important drivers of growth, jobs and social cohesion, RBI in a notification pointed out that MSEs often lack access to affordable financial services, knowledge, education and information.
 
“Micro and small enterprises also face major disadvantages in accessing modern markets.  Obstacles for linking MSEs with domestic / international markets and integrating them corporate supply chains do exist.  In this context, creation of a congenial eco system could address these challenges and bring about their inclusion,” RBI said.
 
A culmination of two regional workshops conducted on the same theme, the forthcoming seminar will discuss the critical synthesis points that came from those workshops.
 
The seminar has six sub-themes on which speakers and experts from various fields would share their views:
 
1.     MSMEs – Inclusive Growth and Financial Inclusion – Bank linkage of excluded MSMEs – Role of Banks, government, RBI, industry associations and other stakeholders.
2.     MSMEs – Credit scoring and credit rating models for financing MSMEs – internal and external.
3.     MSMEs – Coverage of CGTMSE and ECGC – Need for new credit guarantee corporations – expansion and deepening – critical for growth of MSMEs especially start-ups /         venture capital.
4.     MSMEs – Market Linkage – with domestic and global markets – corporate sector and linking MSEs to the supply chain.
5.     MSMEs – need for revamping / strengthening legislations – DRT, SARFAESI – for speeding up recovery of bank dues and bankruptcy / insolvency – exit policy for MSMEs.
6.     MSMEs – Single Window system for approvals and infrastructure development – for orderly promotion and development of MSMEs – through industrial clusters, common         facility centres – setting up the new and revamping the existing ones – MSMED Act, 2006 – Definition and classification of MSMEs – need for aligning with global                         standards.
 
Background:
 
As per the latest census of the Ministry of MSME, more than 99 per cent of industries in India are micro and small enterprises.  They account for a significant proportion of manufacturing, employment and exports and are major contributors to GDP.  They provide employment to almost 60 million people in the country.
 
Micro and small enterprises face major disadvantages in accessing modern markets.  Hence from the point of view of people livelihood and well-being, the sector is of tremendous importance.
 
The fact that MSEs are widely dispersed across the country also makes them more important from a regional development perspective and a means to promote inclusive growth.
 
MSEs do have comparative advantages based on family labour and local knowledge.  The challenge is – How can they be linked to markets or integrated with corporate supply chain to leverage inclusive market access.  This requires well-coordinated trade links between MSEs, corporate and international markets.
 
In support of MSEs, urgent policy intervention is required to ensure fairer market conditions, easy access to international markets, improved government support in relation to fiscal and tax incentives, export incentives, creation of more industrial clusters, provision of rural / urban infrastructure, awareness campaign and a greater role in the decision making process. 
 
In recognition of the above CAB had organised two regional workshops as a prelude to the seminar.
 
Presently access to finance is one of the most significant challenges for the creation, survival and growth of MSMEs.  It is therefore essential for the banks to win MSMEs’ hearts and minds to create a valuable long term relationship with the sector.