Govt open to idea of alternate financing model for MSME: Piyush Goyal

New Delhi: The government is open to the idea of alternate financing model to support micro, small, and medium enterprises (MSME) and that particular areas can be earmarked for them in the proposed industrial townships, commerce and industry minister Piyush Goyal said Thursday.

Urging the industry to share specific issues they are facing in accessing bank credit, Goyal said: “If we get that more specific feedback then we will be able to take it up with the bankers. ECGC is looking at factor services also but my own personal view is that being costlier, people will still prefer to go to the bank and take a loan but we are open to the idea of alternate financing models”.

He also added that MSMEs can be provided land at concessional rates to develop their businesses in the townships.


“Give me specific details (as in) what kinds of problems they (MSMEs) face. Is too much collateral being asked? Suppose an ECGC (Export Credit Guarantee Corporation) cover is available, do they (banks) still ask for collateral, what kind of interest they charge when a 90% guarantee is taken by ECGC in the event of any failure of export credit?,” the minister said at an Assocham event.

His statement assumes significance in the wake of exporters raising concerns over declining bank credit.

Goyal also said that India should aim for one startup per 1,000 people as is the case in Israel as against one startup per 10,000 people in India at present.

On setting aside areas for MSMEs in industrial townships, he said: “I am happy to commit to a particular area earmarked for MSMEs because without MSMEs no large industries will survive. If Toyota is investing Rs 20,000 crore in one of our industrial cities at Shendra-Bidkin at Sambhaji Nagar (Maharashtra), clearly they will need 100s of MSMEs in their support ecosystem.”

In August, the cabinet approved 12 new project proposals under the National Industrial Corridor Development Programme with an estimated investment of Rs 28,602 crore to set up industrial parks/townships in the country.

Single window, Boiler’s Bill
On the Boiler’s Bill which was passed by the Rajya Sabha Wednesday, he said: “Even in the boilers bill. What was the effort? And it's not as if I claim that everything has been done only by our government. It's been a continuing effort”.

Further, he expressed “pain” that the industry is not giving feedback on the ministry's single window system Initiative.

“I've invested huge amount of money, huge amount of personal time to create that single window… (if) you don’t use it, and when you don’t use it, I don’t get any feedback whether it is worth its effort or not,” he said.