Need dedicated commercial bank to ease credit flow to MSMEs: Industry body to govt
industry body representing micro, small and medium enterprises has pitched for a dedicated commercial bank to ease credit flow to the sector. It has also recommended introduction of a law to address the issue of delayed payments faced by such units.
The Federation of Indian Micro and Small & Medium Enterprises (FISME), which represents about two million MSMEs in the country, has in a submission to the government also suggested setting up an equity guarantee fund trust to cover the risks related to equity financing for the sector.
It said the proposals, if implemented, will resolve «the Indian malady of 'missing middle' because of which small businesses fail to graduate to medium-sized enterprises and remain 'dwarfs'». The submission noted that equity financing can be another route for raising capital, as MSMEs, saddled with unhealthy balance sheets and choked cash flow, find it difficult to raise capital through equity.
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