Page 44 - Banking Finance November 2020

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MSMEs. CAs represents the Entrepreneurs while interacting
with the Bank officials and convinces the Bank on the
present and future Business plans. The cost of the Financial
Consultants is also a burden on the MSMEs.

Constitution of a Panel of Consultants - For the purpose
of technological advancement and guidance a panel of
experts and consultants should be prepared, who can help
the MSMEs within the region for transferring the available
technologies effectively. The constitution of panel of these
consultants could be nature wise of the activities of the
MSME. At the time of constitution of panel of experts, there
should be inclusion of the owners of different sectors of
MSMEs.

Special Market teams - Banks have to form special teams Rehabilitation of viable sick units - There is a lot of scope
to source the MSME proposals at specific locations. Formal for sick MSMEs for rehabilitation through further injection
sector Financing Agencies are still unreachable to the of funds in the business by the Banks other than interest
MSMEs which are in unorganized sector. Banks have to come concessions. The tendency shows that Banks do not
to the field for a merit based successful Bank linkages. undertake rehabilitation program on account of higher risks.
A positive approach of banker will help thousands of sick
Relaxation in labour laws and red tape - There should be MSMEs to take a turn around.
relaxation in complex labour laws to avoid the inconvenience
in compliance. Budgetary Support (2020-21) & Initiatives by GOI - The
importance of MSMEs is reiterated in all policy documents
Regulatory - One "all India all-purpose" enactment as MSME and the latest budget (2019-2020) is no different:
regulation to be adopted by all stakeholders in MSME system
with one window and one annual return compliance filing Delay in Payments - The budget has attempted to fix the
coupled with significant direct tax incentives and indirect tax problem of delays in payments to MSMEs. The government
exemptions. has spoken of creating a payment platform for MSMEs to
facilitate the billing and payments through it. This is in sync
Performance incentives - Direct incentives in form for direct with the UK Sinha Committee recommendations on MSME
taxes rebates and set offs, weighted deductions and reliefs reforms.
in indirect taxes combined with low cost funding and credit
access for stakeholders in MSME eco system who make Psb 59minuteloan - The extension of the 59-minute loan
investments in desired areas and achievement of desired scheme to new entrepreneurs will fit well with the
growth results in developing MSME funding and government's emphasis on start-ups and MSME.
infrastructure skills, technology, innovation, global market
access, indigenization, public procurement and vendor Collateral Free Loan - The limit for collateral-free loans has
development, traditional and heritage industry been raised to Rs. 20 lakh from Rs. 10 lakh.
developments.
SIDBI Involvement - Institutional changes in SIDBI should
Rationalization of NPA norms - MSMEs face business be done so that it can be elevated as a market maker for
uncertainties which are general factors in the business of funding of MSMEs. SIDBI should be involved in getting micro-
that size. It could be because of delayed receivables or finance institutions (MFIs) and non-banking finance
temporary liquidity crunches. Classification of NPA for companies (NBFCs) to finance MSMEs, and venture capital
default of three Months is not genuinely applicable to funds would be an integral part of the system that is linked
MSMEs. It should be 6 months or more. to potential borrowers.

44 | 2020 | NOVEMBER | BANKING FINANCE