Lok Sabha Question No. 2038 (UNSTARRED), answered on 2023-12-14
Subject: Loans to MSMEs
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: DNV Senthilkumar. S., Ajay Kumar Mandal, Navneet Ravi Rana, Sunil Kumar Pintu, Locket Chatterjee, Rama Devi, Supriya Sadanand Sule, Amol Ramsing Kolhe, Subhash Ramrao Bhamre, Ramesh Chander Kaushik, Kuldeep Rai Sharma

2038.

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

## LOK SABHA UNSTARRED QUESTION NO. 2038 TO BE ANSWERED ON 14.12.2023

## LOANS TO MSMEs

DR. DNV SENTHILKUMAR S. :

SHRI AJAY KUMAR MANDAL:

SHRIMATI NAVNEET RAVI RANA:

SHRI SUNIL KUMAR PINTU:

MS. LOCKET CHATTERJEE:

SHRIMATI RAMA DEVI:

SHRIMATI SUPRIYA SULE:

DR. AMOL RAMSING KOLHE:

DR. SUBHASH RAMRAO BHAMRE:

SHRI RAMESH CHANDER KAUSHIK:

SHRI KULDEEP RAI SHARMA:

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

- (a) whether the banks lend Micro, Small and Medium Enterprises (MSMEs) across the country and if so, the details thereof;
- (b) whether the MSMEs are facing problems in getting loans from banks and if so, the steps taken by the Government to overcome the challenges being faced by the MSMEs in getting loans from banks in Maharashtra, Bihar, West Bengal, Tamil Nadu and Haryana;
- (c) whether the Government has made an assessment of the collateral securities being demanded by the banking institutions while offering loans to MSMEs in the said States and if so, the details thereof;
- (d) whether  any  action  is  being  taken  to  ensure  that  the  collateral  requirements  for  loans  being demanded from MSMEs in the said States are fair and reasonable according to the size and financial capability of their business and if so, the details thereof;
- (e) whether the Government proposes other schemes to provide easy credit facilities to MSMEs and if so, the details thereof; and
- (f) whether  the  Government  has  conducted  any  survey  of  closed  MSMEs  and  if  so,  the  details thereof?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI BHANU PRATAP SINGH VERMA)

(a) to (e): The Government has taken various measures to ensure sufficient financial accessibility and seamless credit to Micro, Small and Medium Enterprises (MSMEs) in the country, including the States  of  Maharashtra,  Bihar,  West  Bengal,  Tamil  Nadu  and  Haryana.  Some  of  the  credit  related initiatives include the following:

-  Prime Minister's Employment Generation Programme (PMEGP) which is a major credit-linked subsidy programme aimed at generating self-employment;
-  Pradhan Mantri Mudra Yojna (PMMY) for providing loans up to Rs. 10 lakh, to non-corporate, non-farm micro/small enterprises;

-  Rs. 5 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS), for businesses, including MSMEs .The scheme was in operation till 31.03.2023;
-  Strengthening  of  credit  delivery  system  and  to  facilitate  the  flow  of  credit  to  the  Micro  and Small  Enterprise  sector  without  the  hassles  of  collateral  and  third  party  guarantee,  up  to  a maximum of  Rs. 5 crore through Credit Guarantee Scheme;

In  terms  of  para  4.2  of  RBI  Master  Direction  FIDD,  MSME  &  NFS.12/06.02.31/2017-18  on Lending to Micro, Small & Medium Enterprises (MSME) Sector dated July 24, 2017 (updated July 29, 2022) all scheduled commercial banks (excluding Regional Rural Banks and Small Finance Banks) are mandated not to accept collateral security in the case of loans upto Rs. 10 lakh extended to units in MSE sector.

Credit  Guarantee  Fund  Trust  for  Micro  and  Small  Enterprises  (CGTMSE)  provides  credit guarantee to its member lending institutions for loans extended by them to micro and small enterprises (MSEs) without any collateral security and third-party guarantee. CGTMSE has recently collaborated with state of government of Tamil Nadu and West Bengal to support credit guarantee for MSEs in those states.  The CGTMSE details of guarantee approved for Maharashtra, Bihar, West Bengal, Tamil Nadu and Haryana are mentioned in attached Annexure.

(f): A study conducted by SIDBI from September, 2021 to January, 2022, comprising 1,029 Micro, Small and Medium Enterprises (MSMEs) spread across 20 States and 2 UTs revealed that 67% of the respondent MSMEs were temporarily closed up to a period of three months. The study revealed that around 65% of the MSMEs surveyed, have availed the benefits under Emergency Credit Line Guarantee Scheme and around 36% of the respondents (MSMEs) also availed loans under the Credit Guarantee Scheme for Micro & Small Enterprises.

***

Annexure Annexure  referred  in  part  (a)  to  (e)  of  answer  to  Lok  Sabha  Unstarred  Question  no.  2038  on 'Loans to MSMEs' due for reply on 14.12.2023.

## Amt.(₹ Crore)

| CGTMSE - GUARANTEE APPROVED                 | CGTMSE - GUARANTEE APPROVED   | CGTMSE - GUARANTEE APPROVED   | CGTMSE - GUARANTEE APPROVED   | CGTMSE - GUARANTEE APPROVED   | CGTMSE - GUARANTEE APPROVED   | CGTMSE - GUARANTEE APPROVED   | CGTMSE - GUARANTEE APPROVED   | CGTMSE - GUARANTEE APPROVED   | CGTMSE - GUARANTEE APPROVED   | CGTMSE - GUARANTEE APPROVED   |
|---------------------------------------------|-------------------------------|-------------------------------|-------------------------------|-------------------------------|-------------------------------|-------------------------------|-------------------------------|-------------------------------|-------------------------------|-------------------------------|
|                                             | Maharashtra                   | Maharashtra                   | Bihar                         | Bihar                         | West Bengal                   | West Bengal                   | Tamil Nadu                    | Tamil Nadu                    | Haryana                       | Haryana                       |
| Duration                                    | No.                           | Amt.                          | No.                           | Amt.                          | No.                           | Amt.                          | No.                           | Amt.                          | No.                           | Amt.                          |
| FY 2020- 21                                 | 71,850                        | 4,416                         | 22,317                        | 1,086                         | 29,789                        | 1,618                         | 61,535                        | 3,344                         | 18,499                        | 1,218                         |
| FY 2021- 22                                 | 56,027                        | 6,840                         | 24,217                        | 1,661                         | 37,033                        | 2,887                         | 44,897                        | 4,134                         | 22,285                        | 2,707                         |
| FY 2022- 23                                 | 66,055                        | 11,926                        | 42,360                        | 3,468                         | 54,440                        | 6,036                         | 61,883                        | 7,114                         | 30,343                        | 5,025                         |
| FY 2023- 24 Till 30/11/2023                 | 72,134                        | 13,078                        | 51,934                        | 4,285                         | 57,551                        | 6,693                         | 65,327                        | 8,541                         | 28,632                        | 5,225                         |
| Cumulative since Inception as on 30/11/2023 | 6,33,179                      | 62,807                        | 3,29,852                      | 19,330                        | 4,02,097                      | 29,218                        | 6,67,115                      | 42,270                        | 1,71,742                      | 19,457                        |

Source: CGTMSE