Codissia calls for more financial support for MSMEs

It seeks to create a separate committee to study and set parameters for MSMEs so that they have easy access to funds

It seeks to create a separate committee to study and set parameters for MSMEs so that they have easy access to funds

The Coimbatore District Small Industries Association (Codissia) has demanded the increase of the upper limit of automatic unsecured loans for micro, small and medium enterprises (MSMEs) so that the units obtain funds for operational liabilities and to restart businesses.

In a representation to Union Finance Minister Nirmala Sitharaman here on Monday, Association Chairman MV Ramesh Babu said a separate committee should be formed to study and define parameters for MSMEs so that they have easy access to funds. Lending institutions insisted on high credit ratings and security guarantees, which many small borrowers did not have. Without the knowledge of digital lending channels, MSMEs spent more resources responding to complex eligibility factors and completing paperwork. These have caused further delays in securing funding and cash, he said.

The monetary margin for micro and small enterprises should be set at 10% and loan processing fees should be abolished.

Mr. Ramesh Babu pointed out that Coimbatore is a manufacturing hub, made up of a large number of MSMEs who manufacture pumps, motors, compressors, textiles, wet mills, etc. Despite several requests submitted by industry bodies asking the government to control the rise in prices of all raw materials, this issue had not been resolved. The situation was getting worse every day and industries were facing problems such as cancellation of orders, uncertainty in consumption and falling exports.

The MSME sector accounted for 48% of India’s exports and all export earnings came from value-added finished products. The countries imported Indian steel at a relatively lower price and competed with the finished products produced by Indian MSMEs. The Association demanded an immediate ban on the export of all raw materials to facilitate domestic sourcing and control rising prices and implement a zero import duty rate so that MSMEs can import the materials firsts,” Mr. Ramesh Babu said in the memorandum.

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