Lok Sabha Question No. 4002 (UNSTARRED), answered on 2019-01-04
Subject: Relaxing Lending Norms to MSMEs
Ministry: FINANCE
Asked by: N.K. PREMACHANDRAN

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UN-STARRED QUESTION NO. 4002 TO BE ANSWERED ON 4 th  JANUARY, 2019 / PAUSHA 14, 1940 (SAKA)

## 'Relaxing Lending Norms to MSMEs'

4002  :

Shri N.K. Premachandran :

Will the Minister of FINANCE be pleased to state :

- (a) whether the Government proposes to introduce new loan scheme for Micro, Small and Medium Enterprises (MSMEs), if so, the details thereof;
- (b) the criteria fixed by the Government for relaxing the existing terms and conditions of the banks for sanctioning loans;
- (c) whether the Government has noted that the banks are not providing any relaxation from their earlier criteria for sanctioning loans to the MSMEs, if so, the details thereof and the action taken thereon;
- (d) whether  the  Government  has  directed  the  Reserve  Bank  of  India  to  release  more fund  for  availing  loans  by  MSMEs  and  if  so,  the  details  of  amount  released  and earmarked  for  this  purpose  along  with  the  details  of  loan  sanctioned  to  MSMEs during the last four years, State/UT-wise ?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SHIV PRATAP SHUKLA)

- (a) : An online lending portal www.psbloansin59minutes.com with majority ownership of 6 Public  Sector  Banks  (PSBs)/  Financial  Institutions  (FIs)  along  with  their  associated companies,  has  been  launched  which  facilitates  in  principle  approval  for  loans  to Micro  Small  and  Medium  Enterprises  (MSMEs)  upto  Rs.1  crore  within  59  minutes from PSBs. Key features of the portal, inter-alia include enabling borrowers to connect with multiple banks without visiting the branch, financial technology (FinTech) based architecture with high level of information security, analysis of data from various data points,  loan  products  in  line  with  scoring  models  and  assessment  methods  within approved  credit  policies,  prima  facie  eligibility  check  for  credit  guarantee  from CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises), etc.
- (b) : Government and Reserve Bank of India (RBI) have taken several steps to ensure access  of  credit  to  MSMEs. These  inter-alia,  include,  advice  to  all  Scheduled Commercial Banks (SCBs) to achieve a 20% year-on-year growth in credit to Micro and Small Enterprises (MSEs), allocation of 60% of the MSEs advances to the micro enterprise  accounts,  a  10%  annual  growth  in  number  of  micro  enterprise  accounts, additional working capital limit to meet the requirements arising due to unforeseen/seasonal increase in demand, adoption of one cluster, operationalising at least  one  specialised  MSME  Branch  in  every  district,  simplified  computation  of working  capital  of  MSE  units  to  make  it  minimum  20%  of  the  projected  annual turnover  of the unit for borrowal  limits upto  Rs.5  crore,  setting  up  of  Trade Receivables Discounting System (TReDS) to solve the problem of delayed payment of MSMEs, etc.
- (c) & (d) : Loans to MSMEs are extended by individual banks on commercial basis as per  their Board approved loan policy and extant RBI guidelines in this regard. State/UT-wise details of loan extended to MSMEs by Scheduled Commercial Banks (SCBs) during the last four years is at Annexure.

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Annexure referred in reply to part (d) of the Lok Sabha USQ No. 4002

| Sr. No.   | State                     |   2014-15 |   2015-16 |   2016-17 |   2017-18 |
|-----------|---------------------------|-----------|-----------|-----------|-----------|
| 1         | Andaman & Nicobar Islands |    148.49 |    491.53 |    313.91 |    380.75 |
| 2         | Andhra Pradesh            |  52659.9  |  31618.3  |  26746.6  |  32541.5  |
| 3         | Arunachal Pradesh         |   1435.83 |    289.15 |    206.31 |    290.88 |
| 4         | Assam                     |  12116.6  |   7470.8  |   7339.13 |  10571.6  |
| 5         | Bihar                     |   7587.23 |  11491    |  11330.1  |  15000.1  |
| 6         | Chandigarh                |   4759.42 |   4913.01 |   4123.9  |   4920.99 |
| 7         | Chhattisgarh              |  10519.4  |  10685.9  |  11553.6  |  12385.9  |
| 8         | Dadar & Nagar Haveli      |    158.84 |    192.6  |    292.14 |    386.21 |
| 9         | Daman & Diu               |    181.65 |    125.58 |    166.05 |    206.08 |
| 10        | Delhi                     |  85598.2  |  78148.1  |  67695.5  |  79935.5  |
| 11        | Goa                       |   1910.73 |   2577.69 |   2503.47 |   3116.52 |
| 12        | Gujarat                   |  51456    |  55333.6  |  55244.8  |  60645.6  |
| 13        | Haryana                   |  20379.1  |  26976    |  25348.7  |  29622    |
| 14        | Himachal Pradesh          |   3983.16 |   4767.94 |   3813.59 |   5206.56 |
| 15        | Jammu & Kashmir           |   6609.38 |   8714.81 |   5673.54 |   7010.46 |
| 16        | Jharkhand                 |   6036.79 |  10704.1  |   8192.32 |  11339.9  |
| 17        | Karnataka                 |  56031.1  |  51447.7  |  47820.7  |  47001.6  |
| 18        | Kerala                    |  26405.9  |  28420.8  |  29034.1  |  32890.5  |
| 19        | Lakshadweep               |     65.76 |     15.49 |     15.02 |    119.14 |
| 20        | Madhya Pradesh            |  20309.6  |  25948.3  |  24767.9  |  31500.8  |
| 21        | Maharashtra               | 151116    | 208550    | 168356    | 170686    |
| 22        | Manipur                   |   8701.26 |    289.46 |    222.13 |    387.23 |
| 23        | Meghalaya                 |   1100.63 |    623.24 |    454.95 |    527.99 |
| 24        | Mizoram                   |   2071.57 |    338.13 |    206.91 |    596.74 |
| 25        | Nagaland                  |   3309.44 |    345.68 |    279.39 |   1106.61 |
| 26        | Odisha                    |  10554.9  |  12940.7  |  12962.5  |  15383.8  |
| 27        | Puducherry                |   1210.28 |   1438.52 |   2905.21 |   2123.5  |
| 28        | Punjab                    |  34677.6  |  27885    |  23609.5  |  32398.5  |
| 29        | Rajasthan                 |  25097.4  |  33036.3  |  34274.8  |  43190.1  |
| 30        | Sikkim                    |    127.62 |    781.69 |    321.66 |    275.76 |
| 31        | Tamil Nadu                |  79255.7  |  94990.1  |  85829.5  |  88884.5  |
| 32        | Telegana                  |      0    |  30636.7  |  32145.5  |  40651.2  |
| 33        | Tripura                   |    589.8  |   1371.31 |   1320.01 |   1629.23 |
| 34        | Uttarakhand               |   9515.43 |  11338.3  |   6252.88 |  19544.7  |
| 35        | Uttar Pradesh             |  39677.6  |  44298.6  |  43342.9  |  45340.6  |
| 36        | West Bengal               |  40269.5  |  47350.9  |  44561.7  |  58489.3  |
|           | Total                     | 775628    | 876547    | 789227    | 906288    |

Source : RBI

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