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FM to review bank credit to MSMEs tomorrow

New Delhi, May 12 (KNN) In his last meeting with the CEOs of Public Sector Banks and Financial Institutions before the UPA II lays down office, Finance Minister P Chidambaram will review tomorrow the performance of the PSU banks with regard to extension of credit to the MSME sector, among others.
“The Finance Minister will also discuss the progress made with regard to the stalled projects especially in those cases where PSBs have extended credit facilities. The Finance Minister will also discuss the steps taken by the PSBs with regard to financial inclusion,” statement from the Finance Ministry said today.
It said that Chidambaram would also review the bank credit extension to other sectors which are related to the MSME sector.
These include agricultural credit, housing loan, education loan and lending to minority communities.
The micro, small and medium enterprises have been starved of the institutional credit at a time when they needed most in the backdrop of a difficult economic situation.
The gap between demand and supply of bank credit for the MSME sector is a huge 56 per cent in the fiscal 2013-14 but may come down to 43 per cent in the coming years, as per the RBI projections.

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 estimated outstanding credit demand and supply gap of MSMEs will be 56 per cent in 2013-14 at Rs 15,66,089 crore.

Meanwhile, in 2016-17 the gap will be of 43 per cent at Rs 16,33,111 crore.

Even when the demand-supply credit gap would come down, it would still remain at 41 per cent high.