Banks not comfortable lending to MSMEs: FTCCI’s new president

Rising fuel prices have added to the distress of the corporates, says K. Bhasker Reddy

Banks remain uncomfortable lending to manufacturing micro, small and medium enterprises despite the Centre unveiling guidelines aimed at improving access to credit for MSMEs battered by the pandemic, says president of the Federation of Telangana Chambers of Commerce and Industry (FTCCI) K. Bhasker Reddy. Since the pressure of non-performing assets (NPAs) seem to be behind the banks reluctance, Reserve Bank of India must come with guidelines clarifying that such lending will not be classified as NPAs. “The banks will [then] come forth and give,” credit to the MSMEs, Mr.Reddy said in an interaction after he and Anil Agarwal were elected unanimously president and senior vice president respectively of the umbrella body of trade and industry bodies for 2021-22. Noting that manufacturing MSMEs were severely impacted in the second wave of the pandemic, he said instead of implementing the COVID-19 relief schemes through a few nationalised banks, the government should have roped in all banks and financial institutions. Access to bank credit, however, is not the only issue for the manufacturing MSMEs, he said, adding how the rising fuel prices have also added to their stress. The cascading effect has necessitated the need for another round of relief measure for industry, he said.