The Uttar Pradesh government is aiming to facilitate business loans worth more than Rs 62,000 crore to the beleaguered micro, small and medium enterprises (MSME) in the current financial year 2019-20.
The figure of Rs 62,000 crore is 20 per cent higher than the target of Rs 51,808 crore in MSME lending fixed for commercial banks in UP for 2019-20.
So far, the advances made by the commercial banks in the UP MSME sector are to the tune of Rs 40,750 crore, which is more than 78 per cent of the targetted figure of Rs 51,808 crore. In 2018-19, the corresponding sectoral advances during the same period stood at Rs 29,782 crore compared to the target of Rs 41,401 crore, thus achieving 72 per cent of the annual target.
“The progress in MSME advances has been good and we are confident there is a potential to further increase the flow of credit. Therefore, we have urged the commercial banks to hike their annual MSME credit target in UP by at least 20 per cent to more than Rs 62,000 crore,” UP MSME principal secretary Navneet Sehgal told Business Standard here today.
The Adityanath government is also bullish on its flagship ‘one district, one product’ (ODOP) scheme to provide further traction to the MSME sector credit takeoff in UP.
Launched in 2018, the ODOP scheme is aimed at reviving UP’s indigenous industries through financial, marketing and training support with the help of banks, knowledge partners and private marketing entities, including ecommerce.
Interestingly, the growth in the flow of credit to the UP MSME sector has been better vis-a-vis other components of the priority sector lending viz. agriculture, education, housing etc.
The MSME sector accounted for 80 per cent of the state’s exports worth Rs 1.14 trillion in 2018-19. The MSMEs generate nearly 60 per cent of the annual industrial output and ranks second after agriculture in highest employment generation.
According to estimates, nearly 80 per cent of the country’s MSMEs, especially the micro units, still do not have access to institutional capital and they largely depend upon the unorganised players for meeting their financial needs.
To accelerate the pace of MSME advances, the UP government has also drawn up a roadmap of organising ‘loan melas’ or credit camps across all 75 districts.
The state has long been asking banks to improve the credit flow to the MSME sector in UP and lamented that the loaning process was quite cumbersome despite the new guidelines issued by the central regulatory authorities.
According to the statistics shared by the MSME export promotion council (MSME EPC) here, UP had posted 100 per cent growth in the sector with total number of units jumping from 4.4 million in 2015-16 units to 9 million in 2017-18.
Source: Business Standard