Credit to MSMEs to be doubled within 5 years: FM

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SME Times News Bureau | 03 Apr, 2010
Finance Minister Pranab Mukherjee on Friday said that the government is committed to double the credit flow to the micro, small and medium enterprise (MSME) sector within five years.

"Timely availability of credit to MSMEs is extremely important to meet their (MSMEs') growing needs and to help them keep their business lifeline vibrant and progressive," Mukherjee said speaking at and event organized by Small Industries Development Bank of India (SIDBI) in New Delhi.

Underling Prime Minister Manmohan Singh's commitment to double the credit flow to MSME sector within five years, he said that the various measures announced in this year's budget will revive private investment and put the economy back on the growth path of 9 percent per annum.

"The government of India has always considered the MSMEs as an important pillar of economic growth and has supported the sector with proactive and growth oriented policies. It is an acknowledged fact that finance is a highly effective tool for creating economic opportunity and fighting poverty," the minister said.

Mukherjee added that the Prime Minister’s Task Force on MSMEs set up to address various issues and concerns of the sector, has recently submitted its Report and has made a number of recommendations for the sector, which would be examined in a time-bound manner.

Stating that micro finance has emerged as a new channel of economic empowerment and attainment of the Millennium Development Goals, the Minister commended SIDBI for its role in the micro finance arena and for reaching out to over 2 crore beneficiaries through its partner micro-finance institutions.

The Finance Minster said that the MSME sector is a key contributor to the growth story of Indian economy.

"This sector contributes 8 percent of the country’s GDP, 45 percent of the manufactured output and 40 percent of our exports and above all, provides employment to nearly 6 crore persons through 2.6 crore enterprises, he said.

According to the Eleventh Five Year Plan, the MSEs not only generate the highest employment per capita investment, but have also checked the rural – urban migration by providing villagers and people living in isolated areas with sustainable sources of local employment, Mukherjee added.