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MSMEs can now access 9,000 factors to monetise their pending bills: Sitharaman
She said MSMEs have options to encash their pending bills through factoring – either with a discount or without any discount.
Finance minister Nirmala Sitharaman on Saturday said the recently enacted factoring regulations have raised the number of factors from nine to 9,000 as micro, small and medium enterprises (MSMEs) can now approach several non-banking financial companies (NBFCs) to monetise their pending receivables. Referring to the Factoring Regulation (Amendment) Bill that was passed in the monsoon session of Parliament, Sitharaman said the legislation aimed to benefit several MSMEs supplying goods and services to large companies and wait for months to get payments.
She was speaking at the launch of the ‘Ubharte Sitaare’ Fund in Lucknow, an initiative of India Exim Bank and Small Industries Development Bank of India (SIDBI) for export-oriented firms and start-ups. She said MSMEs have options to encash their pending bills through factoring – either with a discount or without any discount. Factoring is a business of acquisition of receivables of assignor by accepting assignment of such receivables or financing, whether by way of making loans or advances or in any other manner against the security interest over any receivables.
‘Ubharte Sitaare’ programme includes a mix of structured support, both financial and advisory services through investments in equity, debt, and technical assistance to Indian companies. Sitaraman also released a study by India Exim Bank on “Indian Sports Goods Industry: Strategies for Tapping the Export Potential” that highlighted an untapped export potential of $227.4 million in the sports goods industry.
Another study on “Exports From Uttar Pradesh: Trends, Opportunities And Policy Perspective” said while exports from UP have registered robust growth during the recent period, there remains an untapped merchandise export potential of nearly $12.2 billion.
UP reported over 36% jump in exports to ₹1.21 lakh crore in 2020-21, compared to ₹88,967 crores in 2017-18 because of the state government’s policies such as One-District-One-Product (ODOP) and robustness of its small industries.
Sitharaman said UP has the highest number of MSMEs, and the state government’s ODOP initiative will unlock their true potential for both domestic and export markets.
She also hailed Adityanath for creating an investment-friendly atmosphere in Uttar Pradesh.
“ I am very proud of the Chief Minister Yogi Adityanath who understands the larger national interest, translates that into state’s policies and takes it at the execution level to the last mile.
Speaking at the event, the MSMEs minister of UP Sidharth Nath Singh said the Yogi Adityanath government has taken several policy measures to boost MSMEs. As a result, in the last four-and-a-half years, the state has disbursed over ₹2.5 lakh crore loans to small entrepreneurs and generated 26 million additional employments.
MSMEs received over ₹73,000 crores of loans last year alone, despite the Covid-19 pandemic, which is significantly higher than ₹28,000 crores disbursed in 2016-17, he said. He gave credit to chief minister Yogi Adityanath for rapid development in the state’s industrial activities. In new Uttar Pradesh, businesses can be started in 72 hours, he said.
