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Narayan Rane says MSMEs have complained of banks not releasing credit despite govt schemes; will discuss issue with FinMin

Ease of Doing Business for MSMEs: MSME Minister Narayan Rane has stressed the importance of removing complexities faced by entrepreneurs in setting up new industries such as lack of ease in securing bank credit in order for the MSME sector to scale up. Addressing an event organised by the Institute of Chartered Accountants of India (ICAI) and IMC Chamber of Commerce and Industry earlier this week, Rane said multiple complaints he received from entrepreneurs are related to bank credit. “The question asked was when the government has declared various schemes (to provide credit), then why don’t banks release the amount to entrepreneurs? We will meet with the finance ministry for this. There might be challenges for banks as well,” Rane said.

“Such challenges including infrastructure and other government schemes related should be solved for our youth looking to enter the industry,” the minister said.

On Thursday, ICAI and IMC launched a 75-day-long MSME Yatra programme from Mumbai to support MSMEs. The MSME Yatra aims to coordinate, synergize and leverage the various strands of excellence driving innovation and entrepreneurship, an ICAI statement noted. The initiative will enable a platform to help improve MSMEs access to knowledge, credit, and marketing competitiveness. 

According to Rane, the MSME ministry will send its representatives to every state and union territory of the country to understand the challenges MSMEs face and provide them with the necessary support to help boost employment as well as exports. “We have promised that we will take it (MSMEs’ share in India’s exports) to 60 per cent as soon as possible.”

Last month, export credit provider Export Credit Guarantee Corporation of India (ECGC) launched a scheme to insure up to 90 per cent of the credit risk in export finance to help small exporters by encouraging banks to provide more credit for export amid current global economic uncertainty. 

However, MSMEs’ share in the country’s annual merchandise exports has declined to 45.04 per cent in FY22 in comparison to 49.75 per cent during FY20 and 49.35 per cent during FY21 while India’s exports jumped 34.63 per cent from $313.3 billion in FY20 and 44.5 per cent from $291.8 billion in FY21 to record $421.8 billion in FY22. The data on the value of MSME exports and its share in overall exports was shared on Monday by the Minister of State for MSMEs Bhanu Pratap Singh Verma in a written reply to a question in Rajya Sabha.