Lok Sabha Question No. 3603 (UNSTARRED), answered on 2016-08-08
Subject: Loan to MSME
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: SUBHASH PATEL, PREM DAS RAI

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

## LOK SABHA UNSTARRED QUESTION NO. 3603 TO BE ANSWERED ON 8.8.2016

## LOAN TO MSME

## 3603. SHRI  SUBHASH  PATEL:

## SHRI  PREM DAS  RAI:

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

- (a) whether the Government has taken note that entrepreneurs are facing problems/hurdles  in  availing  loan  facilities  under  various  schemes  of  the  Government  for promotion of the Micro, Small and Medium Enterprises (MSMEs) in the country, if so, the details thereof and the reasons therefor along with the reaction of the Government thereto;
- (b) whether the Government has fixed any responsibility of officials in this regard, if so, the details thereof along with the other steps taken/being taken by the Government to obviate these hurdles;
- (c) the number of MSMEs granted loan and recovery made from them under the central microfinancing  programme  in  the  country  including  Sikkim  during  the  last  three  years, State/UT- wise; and
- (d) the  average  number  of  days  required  to  get  a  loan  under  the  said  scheme  in  the country?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI HARIBHAI PARTHIBHAI CHAUDHARY)

(a) & (b): The  Government  is  conscious  of  the  problems  being  faced  by  MSMEs  in availing loan facilities under various schemes of the Ministry. The micro, small and medium enterprises (MSMEs) face constraints in accessing credit facilities from institutional sources which include inadequate and timely credit, high cost of credit, collateral requirements, etc. MSMEs do have the disadvantage of being perceived as high risk category by Banks.

The  Reserve  Bank  of  India  (RBI)  has  issued  detailed  guidelines  to  all  scheduled commercial banks on lending to micro, small and medium enterprises (MSME) sector which, inter alia, provide for a time frame for disposal of loan applications, loan limit for dispensing the collateral requirement and sub-targets for micro enterprises within the MSE lending.

(c): Small Industries Development Bank of India (SIDBI) has been providing assistance for micro finance (loans upto ` 50,000) and also the Missing Middle Segment (loans in the range  of  `  50,000  -  `  10,00,000)  through  NBFCs  /  NBFC-MFIs,  etc.  For  this  particular scheme,  Office  of  Development  Commissioner  (MSME)  under  the  Ministry  of  MSME provide funds to the SIDBI, in the form of 'Portfolio Risk Fund  (PRF)' which is used for security deposit requirements of the loan amount from the MFIs/NGOs and for meeting the cost of interest loss.

The details as on March 31, 2016 are given in the table below:-

(Figures in crore)

|                      |   Cumulative Sanction |   Cumulative Disbursement |   Outstanding |   No. of beneficiaries |
|----------------------|-----------------------|---------------------------|---------------|------------------------|
| As on March 31, 2016 |                 12254 |                     10769 |          2996 |                   3.45 |

State wise assistance is as follows:-

| State          | Disbursement during FY 2014   | Disbursement during FY 2015   |   Disbursement during FY 2016 |
|----------------|-------------------------------|-------------------------------|-------------------------------|
| Andhra Pradesh | 112.22                        | 292.22                        |                        398.25 |
| Assam          | 3.75                          | 19.25                         |                         15.5  |
| Bihar          |                               |                               |                          3    |
| Chandigarh     |                               |                               |                          0    |
| Gujarat        | 5.00                          | 5.00                          |                         18    |
| Jharkhand      |                               |                               |                          1    |
| Karnataka      | 238.00                        | 301.00                        |                        438.5  |
| Madhya Pradesh |                               | 15.00                         |                          0    |
| Maharashtra    | 25.00                         | 5.00                          |                          8.5  |
| New Delhi      | 10.00                         | 105.00                        |                          2.5  |
| Odisha         |                               | 7.00                          |                         23    |
| Rajasthan      |                               |                               |                          7    |
| Tamilnadu      | 15.00                         | 218.50                        |                        276.25 |
| Uttar Pradesh  | 50.03                         | 71.00                         |                        139    |
| West Bengal    | 155.00                        | 205.00                        |                         72.5  |
| Total          | 614.00                        | 1243.97                       |                       1403    |

The scheme is not in operation in other States/UTs (including Sikkim) than mentioned above.  The  percentage  of  recovery  made  during  FY  2014,  FY  2015  &  FY  2016  for  the standard accounts are 93.75%, 97.29% & 99.99% respectively. Overall, negligible NPAs.

- (d): No  such  average  time  has  been  calculated.  However,  generally  the  time  taken  for sanction of loan applications of MFIs is in the range of 6-8 weeks from the date of receipt of application with complete information.

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