Though it is thought of to be the spine of the economic sector, the monetary well being of the MSME sector in Maharashtra is removed from sound. With high NPAs and low disbursal of credit score, the sector is gazing an unsure future though quite a few schemes are being directed in the direction of it.
Along with agriculture, housing and schooling, lending to the MSME sector additionally kinds a part of priority-lending portfolio of banks. At the beginning of the monetary yr, banks are allotted a goal for lending to the MSMEs which they need to fulfil by the tip of the yr. This is just like the agriculture banks that are anticipated to stroll the additional mile to lend to those items which by far generate the utmost employment in the economic sector.
However, Maharashtra banks are well on their solution to miss assembly their goal for the present monetary yr by a pretty big margin.
As of September 30, 2020, out of the Rs 2,48,489 crore goal for the present yr, banks have managed to disburse Rs 90,081.15 crore — a measly 36 per cent. Banks, nevertheless, have declared 26.83 lakh MSME accounts as NPA with the excellent quantity being pegged at Rs 2,54,202 crore.
This high degree of NPA coupled with low credit score line availability, business insiders say, is the most important downside going through the sector at the same time as India information optimistic industrial development.
The central authorities has additionally prolonged a particular credit score line for the sector to assist them deal with the Covid-related slowdown. But business insiders say many of the interventions are not reaching the sector, which at current is going through the double whammy of inflated uncooked materials prices and low credit score line availability.
Most of the MSMEs, business insiders say, work in casual sector and thus have fallen out of the gambit of institutional credit score.
Prashant Girbane, director common of the Mahratta Chamber of Commerce Industries and Agriculture (MCCIA), blamed the ignorance among the many banks and sector as a doable cause for the low offtake of credit score. “Both the banks and the MSMEs ought to stroll the additional mile to permit them institutional credit score,” he mentioned.
But what is extra worrisome is the high degree of NPAs reported in the sector. This, Girbane and others mentioned, was a sign of the stress felt in the sector at massive.
“Generally, round 10-15 per cent of the MSMEs exit of enterprise yearly however that is in the pure course of issues. But the pandemic has dealt extra critical blows to the sector. Our surveys have proven that the enterprise pickup in this sector is gradual,” he mentioned.
What is mandatory is a particular enhance to make sure the sector will get again to its toes in the following few months.