SIDBI chairman hails government support for MSMEs

SIDBI has hailed the government’s move to mandatorily bring all major public sector companies to register themselves in Trade Receivables electronic Discounting System (TReDS) platform in the next 90 days.

Small Industries Development Bank of India (SIDBI) is the principal financial institution for the financing and development of the Micro, Small and Medium Enterprise ( MSME) sector.

“This will definitely boost the MSME sector by ensuring immediate funding against their trade receivables. The financing cost is lower as these are based on buyers’ credit profile. Overall, this will help improve the MSME's liquidity and competitiveness,” said SIDBI’s chairman Mohammad Mustafa.

“This was a long pending demand of MSMEs. SIDBI's TReDS platform RXIL is geared to leverage the potential created by this announcement,” he added.

The government on Tuesday after announcing the Rs 2.11 lakh crore bank recapitalisation plan had said that it will push credit growth in the medium and small enterprises sector as it aims to generate more employment.

Banks will come out with sector specific Mudra financing products and a special campaign will be launched in 50 high employment clusters of MSME.

Financial services secretary Rajiv Kumar had said that MSME and SMEs are backbone of the economy and the bank recap plan would also directly benefit them.

“MSMEs face two major problems, first being access to finance and hence cash crunch, and second is access to markets,” he had said.

The government will also update udaymitra.in, a web portal where MSMEs can list their projects and banks can compete to finance that project.

Kumar had said that banks will also help MSMEs to finalise their project templates and 100 bank approved project templates will be put on the web portal.

The government will also develop sector specific Mudra financing products such as Mudra textile and Mudra manufacturing to give a boost to credit growth.