Industry cheers boost

Credit-starved small and medium enterprises can look forward to cheaper funds after public sector banks on Monday announced a 1 percentage point cut in existing lending rates for such companies.

Credit-starved small and medium enterprises can look forward to cheaper funds after public sector banks on Monday announced a 1 percentage point cut in existing lending rates for such companies. “The micro, medium and small enterprises (MSME) sector has been one of the worst hit as a result of the credit crisis and this would help ease the cost of credit burden on these companies,” Chandrajit Banerjee, director-general, Confederation of Indian Industry (CII), said.

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The government has recently announced a guarantee cover of 50 per cent for loans of between Rs 50 lakh to Rs 1 crore for such firms. Besides, public sector companies have been requested to ensure prompt payment of bills of MSMEs.