West Bengal MSEs demand more loans as rates fall
KOLKATA: With interest rates of commercial banks declining, demand for cheaper loans for micro and small enterprises (MSEs) under the Small Industries Development Bank of India (SIDBI) refinance scheme is rising.
Expressing solidarity with demand, West Bengal Finance Corporation (WBFC), which partly depends on refinance credit from SIDBI to fund MSEs, has urged the ministry of micro, small & medium enterprises (MSMEs) to take appropriate measures to lower interest rate on SIDBI’s refinance credit from the existing 9.25%.
“For paying a 9.25% interest to SIDBI, WBFC, in order to cover its cost of funding, was forced to fix its own interest rates at 10-13% on refinance-backed loans, which is much higher than 8-9% interest on housing or education purposes, now being offered by commercial banks,” said WBFC managing director Kamal Chakrabarty.
Not only this, the existing Rs 5 crore cap on loans also prohibits us to raise our funding to MSEs under that scheme. To get rid of the restriction, WBFC has urged the ministry to remove that cap, added Mr Chakrabarty.
To further extend the refinance scheme’s coverage among MSMEs, WBFC has also proposed the ministry to upgrade the eligibility criterion of MSMEs in terms of net worth. For this, it has suggested to double the existing threshold limit on net worth to Rs 40 crore.
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