Page 39 - Banking Finance November 2020

ARTICLE

MSME ADVANCES-

ROOT CAUSE

ANALYSIS OF POOR

GROWTH &

SUGGESTIONS FOR

IMPROVEMENT

Executive Summary department and advance part is being looked after by
Banks, mainly Public Sector Bank.
The Micro, Small & Medium Enterprises (MSME) sector is
expected to play a major role in the emergence of the
However, The Government of India is at crossroads these
Indian economy. The growth of this segment is extremely
days. On one hand, the projects to augment MSME growth
crucial to meet the national aspiration of financial inclusion
are focused around providing clean access to finance. On
and generation of significant levels of employment across
the other hand, banks are facing rising trend of stress in
urban, semi urban and rural areas across the country.
MSME. Though, time and again relief has been given to
Further, it can rear and support development of new age
accelerate this sector but this is not a permanent solution.
entrepreneurs who have the potential to create globally
Hence, we have to analyse basic root cause to augment
competitive businesses from India. Time and again,
suitable measures by plugging the gap for a sustained
Government has given importance to develop this sector by
growth of MSME sector.
giving all types of helps i.e. technical and financial. Technical
part is being looked after by various Government
Challenges Faced by MSME Sector
Leading to Stress build-up
About the author
Credit Gap in MSME Sector - Credit exposure to MSMEs
Vijay Kumarr Shaw increased by 12% to Rs. 15.7 trillion in June 2019 (from Rs.
M.Sc., CAIIB I, CTC (NIBM) 14 trillion in June 2018), according to data from TransUnion
Chief Manager, Centre In-Charge CIBIL, a credit information company, and Small Industries
Union Bank of India, Development Bank of India (SIDBI). But this still falls
Staff Training Centre, Kolkata
significantly short of the total credit requirement in the

BANKING FINANCE | NOVEMBER | 2020 | 39