India plans alternate financing for MSMEs; minister Piyush Goyal highlights credit access and industrial township support
New Delhi: The Modi-led NDA government is open to exploring some alternate financing models for micro, small, and medium enterprises (MSMEs) where the concerned ministry can earmark particular areas in the proposed industrial townships for the MSMEs. The statement of the government comes at a time when small business houses in the country are reportedly facing specific issues in accessing bank credit and the similar concerns to grow their businesses.
Urging the crucial issue for the MSMEs, commerce and industry minister Piyush Goyal on Thursday said that the industry should share specific issues they are facing in accessing bank credit and hinted that the government is open to exploring alternate financing models for MSMEs. “The ministry can earmark particular areas in the proposed industrial townships for the MSMEs,” he said in an event here.
Exporters have raised concerns over declining bank credit, particularly to the MSME segment. While exports grew by 15 per cent in the rupee terms between 2021-22 and 2023-24, the outstanding credit in March 2024 dropped by 5 per cent over the same month in 2022, according to exporters.
“As export credit guarantee corporation or ECGC cover is available across the sector, we will be able to take up the credit issue with the bankers, if we get that more specific feedback then. The ECGC is looking at factor services also but my own personal view is that being costlier, people will still prefer to go to the bank and take a loan but we are open to the idea of alternate financing models," he said here at a function,” Goyal said.
In August, the cabinet approved 12 new project proposals under the National Industrial Corridor Development Programme (NICDP) with an estimated investment of Rs 28,602 crore to set up industrial parks/townships in the country. These industrial areas will be located at Khurpia in Uttrakhand, Rajpura-Patiala in Punjab, Dighi in, Maharashtra, Palakkad in Kerala, Agra and Prayagraj in UP, Gaya in Bihar, Zaheerabad in Telangana, Orvakal and Kopparthy in AP and Jodhpur-Pali in Rajasthan.
“I am happy to commit to a particular area earmarked for MSMEs because without MSMEs no large industries will survive. If Toyota is investing Rs 20,000 crore in one of our industrial cities at Shendra-Bidkin at Sambhaji Nagar (Maharashtra), clearly they will need 100s of MSMEs in their support ecosystem,” Goyal said, adding that the pain that the industry is not giving feedback on the ministry’s single window system Initiative.
