NSIC, SBI may soon join hands to provide easy credit to SMEs

With an aim of providing affordable and easy credit to small and medium enterprises (SMEs), the National Small Industries Corporation (NSIC) may soon sign a pact with State Bank of India (SBI), reports media.

"The talks to sign the agreement with SBI are in final stage. Now, any day we would sign it (the pact)," NSIC Chairman-cum-Managing Director, H P Kumar recently told a leading news agency.

More and more banks are willing to sign similar pacts as they want MSMEs to be their customers, he said.

NSIC at present has such pacts with various banks, including YES Bank, HSBC, Axis Bank, Union Bank of India and Central Bank of India.

Most of the MSMEs face credit crunch as they fail to fulfill collateral requirements and have limited access to equity capital.

"We are also trying to sign this pact with the remaining banks so that small units get easy credit flow in every part of the country," he added.

Also, the Micro, Small and Medium Enterprises (MSME) Ministry is in the process of holding consultations with various banks to persuade them to improve flow of credit to small sector, the report said.