The government will double the credit flow to micro, small and medium enterprises (MSMEs) and plans are afoot to provide a one-stop access for capacity building, credit and technology support to small entrepreneurs.
“Credit is the lifeline of any business. The government is committed to double the flow of credit to MSMEs in five years,” Prime Minister Manmohan Singh said after giving away national awards to entrepreneurs in the sector.
Loans outstanding to this sector from the public sector banks have registered a growth of close to 25 per cent in the past one year.
“I would urge other banks also to ensure higher flow of funds to these enterprises,” Singh said, as he urged these enterprises to explore new and emerging sources of finance such as venture capital and private equity. Singh said the government has identified 2,000 clusters across the country and “specific interventions are being carried out in 500 of them to start with.”
A programme of comprehensive reforms in the Khadi sector is also planned to be launched with assistance from the Asian Development Bank, he said. He said he has issued directions for constitution of a task-force that would look into the difficulties still being faced by this sector.
“After the recommendations of the task force are available within a time-bound period of three months, we will decide on how to further move ahead on this road to provide relief and support to this important sector,” he said.