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Delay in loan sanction-poor handholding continues to hamper MSMEs: Report

New Delhi, Sept 19 (KNN) The delay in the process of sanctioning of loans at different stages and poor handholding despite various schemes in place for the Micro, Small and Medium Enterprises (MSMEs), continue to hamper the growth of the sector in the country, a report revealed.

According to the report submitted to the MSME ministry by Management Development Institute (MDI), the MSME sector is also impacted due to the hypothecation and collaterals that are asked for obtaining credit.

Also physical verifications and delay in adjustment of margin money and not a very sound marketing layout of the products made by the MSMEs result In the poor performance of the sector.

The report recommended time bound loan procedure as an immediate step to be taken in order to assist the sector.

Also the Cash Credit Account (CCA) component of the loan could be reduced. Maximum CCA may range up to 40% of total loan can be considered, the report added.

The observations were made in the study titled Evaluation Study of Prime Minister’s Employment Generation Programme (PMEGP) carried out by MDI.

The primary aim was to examine the impact of the scheme in terms of employment generation and improvement in income of the rural and urban artisans and unemployed youth, major problems in implementation of Scheme and ways to resolve them and to make recommendations on making further improvements in the Scheme