Lok Sabha Question No. 303 (STARRED), answered on 2023-08-10
Subject: Challenges Faced by MSMEs in Getting Loans from Banks
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Rama Devi, Ramesh Chander Kaushik

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA STARRED QUESTION NO. 303 TO BE ANSWERED ON 10.08.2023

## CHALLENGES FACED BY MSMEs IN GETTING LOANS FROM BANKS

*303. SHRIMATI RAMA DEVI:

SHRI RAMESH CHANDER KAUSHIK:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) the  steps  taken  by  the  Government  to  overcome  the  challenges  being  faced  by  the Micro,  Small  and  Medium  Enterprises  (MSMEs)  in  getting  loans  from  banks  in  Bihar, Haryana, Maharashtra, Jammu and Kashmir, West Bengal and Jharkhand;
- (b) whether  the  Government  has  made  an  assessment  of  the  collateral  securities  being demanded  by  the  banking  institutions  while  offering  loans  to  MSMEs  in  Bihar,  Haryana, Maharashtra, Jammu and Kashmir, West Bengal and Jharkhand and if so, the details thereof;
- (c) whether any action is being taken to ensure that the collateral requirements for loans being demanded from MSMEs in Bihar, Haryana, Maharashtra, Jammu and Kashmir, West Bengal and Jharkhand are fair and reasonable according to the size and financial capability of their business; and ?
- (d) if so, the details thereof?

## ANSWER

## MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI NARAYAN  RANE)

- (a) to (d): A statement is laid on the Table of the House.

## STATEMENT  REFFERED  TO  IN  REPLY  OF  PART  (a)  TO  (d)  OF  THE  LOK SABHA STARRED QUESTION NO. *303 ON 'CHALLENGES FACED BY MSMES IN GETTING LOANS FROM BANKS' FOR REPLY ON 10.08.2023

(a) to (d): The, Government has taken many  measures to  improve the  flow of credit to MSMEs in  the  country  including  the  States  of  Bihar,  Haryana,  Maharashtra,  Jammu  and Kashmir, West Bengal and Jharkhand. Some of them are given below:

- i. Priority Sector Lending Guidelines: In terms of Master Direction on 'Priority Sector Lending (PSL) - Targets and Classification' dated September 4, 2020, all bank loans to MSMEs conforming to the conditions prescribed therein qualify for classification under Priority Sector Lending.
- ii. Collateral  requirements  of  MSME  units:  Scheduled  Commercial  Banks  have  been mandated not to accept collateral security in the case of loans up to ₹10 lakh extended to units in Micro & Small Enterprises category. RBI issued circular No. RPCD.SME & NFS. BC. No. 79/06.02.31/2009-10 dated May 6, 2010.
- iii. CGTMSE  provides  credit  guarantee  to  its  Member  Lending  Institutions  for  credit extended by them to Micro and Small Enterprises without any collateral security and third party guarantee.
- iv. With  effect  from  01.04.2023,  the  credit  limit  for  Guarantee  Coverage  under  Credit Guarantee Scheme for Micro & Small Enterprises has been enhanced from ₹ 2 crore to ₹ 5 crore and the annual guarantee fees have been reduced by 50%.
- v. Infusion of Rs.9,000 crore in the corpus of Credit Guarantee Fund Trust for MSEs to enable an additional credit of Rs.2.00 lakh crore at reduced cost (Budget announcement 2023).
- vi. Under the revised guidelines of Prime Minister's Employment Generation programme issued  on  13.05.2022,  the  project  cost  for  Manufacturing  and  Services  has  been enhanced to Rs. 50.00 Lakh and Rs. 20.00 Lakh, respectively, from Rs. 25.00 Lakh and Rs. 10.00 Lakh.
- vii. Under  Aatmanirbhar  Bharat,  the  Government  of  India  has  announced  Self  Reliant India Fund to infuse equity in MSMEs which have the potential and viability to grow.
- viii. New  revised  composite  criteria  of  Investment  &  turnover  for  classification  of MSMEs adopted on 26.06.2020.
- ix. 'Udyam Registration' for MSMEs, for Ease of Doing Business w.e.f. 01.07.2020.
- x. Launch of Udyam Assist Platform on 11.01.2023 to bring Informal Micro Enterprises under the formal ambit for availing the benefits under Priority Sector Lending.
- xi. No global tenders for procurement up to Rs. 200 crore.

Details of guarantees approved cumulatively under the Credit Guarantee Scheme for Micro and Small Enterprises in respect of the States of Bihar, Haryana, Maharashtra, Jammu and Kashmir, West Bengal and Jharkhand, since inception in 2000-01 till 31.03.2023 are given below:

| Guarantees approved under Credit Guarantee Scheme for Micro and Small Enterprises   | Guarantees approved under Credit Guarantee Scheme for Micro and Small Enterprises   | Guarantees approved under Credit Guarantee Scheme for Micro and Small Enterprises   | Guarantees approved under Credit Guarantee Scheme for Micro and Small Enterprises   |
|-------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------|
| Sr. No.                                                                             | States / UTs                                                                        | Cumulative guarantees approved (since inception in 2000-01 to 31.03.2023)           | Cumulative guarantees approved (since inception in 2000-01 to 31.03.2023)           |
|                                                                                     |                                                                                     | Number                                                                              | Amount (Rs. crore )                                                                 |
| 1                                                                                   | Bihar                                                                               | 2,77,918                                                                            | 15,045                                                                              |
| 2                                                                                   | Haryana                                                                             | 1,43,110                                                                            | 14,232                                                                              |
| 3                                                                                   | Maharashtra                                                                         | 5,61,045                                                                            | 49,729                                                                              |
| 4                                                                                   | Jammu &Kashmir                                                                      | 2,11,523                                                                            | 6,230                                                                               |
| 5                                                                                   | West Bengal                                                                         | 3,44,546                                                                            | 22,525                                                                              |
| 6                                                                                   | Jharkhand                                                                           | 1,93,012                                                                            | 14,153                                                                              |

*****