Chandigarh, Oct 24 (KNN) The Canara Bank today signed a Memorandum of Understanding (MOU) with industry body Confederation of Indian Industry (CII) to ensure that micro, small and medium enterprises have easier access to credit.
As per the agreement, Canara Bank will offer a concessional credit of 50 basis points on the applicable card rate of interest to all MSME units which are CII’s members. In addition, entrepreneurs of those units will receive a discount of 50 per cent in processing fee, reports said.
The MoU was signed by Canara Bank General Manager (MSME wing) R Madhusudan and Chairman Regional Committee on MSMEs, CII (Northern region) Raman Saluja.
With increased focus on lending to the MSME sector, the bank is seeking a 24 per cent growth in MSMEs as against the 11 per cent growth in advance last fiscal. While Rs 37,000 crore was the bank’s target in 2012-13, this year lending to the sector will be Rs 50,000 crore.
The public sector bank has launched two lending schemes MSE 'Pragati' and MSE 'Unnati' under which the bank is financing to MSME sector without any collateral security on third party guarantee, reports said.
Meanwhile, a report released by CII in collaboration with Resurgent India on 'Financing for Growth' has highlighted the problems being faced by the MSME sector in getting adequate and timely finance from banks.
The report noted that only 25 per cent of total funding in case of MSME sector comes from banks and financial institutions, while the rest is arranged from other sources, including internal accruals and friends.
"MSMEs have a very high demand for finance, a large part of which is not met, particularly to finance their growth. There is a total financial requirement of Rs 32.50 lakh crore in MSME sector comprising Rs 26 lakh crore of debt demand," the report said.