Demonetisation: Bankers too busy to clear MSE entrepreneur loans

Rajahmundry: Demonetisation has badly hit the micro and small entrepreneurs (MSE) who are unable to get loans from  banks to set up industrial units. The bankers are preoccupied with dealing with the rush of customers either to exchange scrapped notes for new ones or to withdraw cash in six south Indian states including AP, TS, Tamil Nadu, Karnataka, Kerala and Pondicherry.

Ever since the Centre announced the demonetisation of Rs 1,000 and Rs 500 notes, people have been rushing to banks to exchange the old notes for new ones. Lack of adequate stock of new notes with the bankers has complicated the matters. The limit imposed on cash withdrawals and no money in ATMs lead to people rushing to the banks to get cash. The bankers are forced to set aside the normal functioning of the banks.

Micro and small entrepreneurs approaching banks for loans are being advised to come later since November 8. The entrepreneurs say that despite preparing project proposals and approaching the bankers, they are not getting proper response from them.

There is no improvement in the situation, they say. If the same situation continues for some more time, the micro and small entrepreneurs will get discouraged and their proposals to set up industrial units will be delayed and this will in turn affect the employment generation.

The entrepreneurs said that the Credit Guarantee Trust for Micro and Small Enterprises developed in 2006 during the Congress government is not being implemented. The entrepreneurs used to get bank loan ranging from Rs 5 lakhs to Rs 1 crore without security to set up industrial units.

The entrepreneurs say that the newly introduced Pradhan Mantri Mudra Yojana by the BJP government is also not being implemented properly as the entrepreneurs used to get loan ranging from Rs 50,000 to Rs 10 lakhs without security.

Micro, Small and Medium Enterprises Development Corporation chairman B.V. Rama Rao said, “No micro and small entrepreneur is able to avail loan from banks for the last two months as the banks are busy in handling the customers due to demonetisation. We appeal to the Centre to encourage the entrepreneurs by reducing interest rate on bank loan to four per cent from the existing 14% to set up more industrial units which in turn will create employment.””