With low investment requirements, operational flexibility, and the capacity to develop appropriate indigenous technology, small and medium enterprises have the power to propel India to new heights, he said.
In most of the competing nations, MMF and its blended textile product exports account 60 to 80% while in India, the same is below 25% mainly due to the expensive raw material.
The principal financial institution engaged in the promotion, financing and development of MSMEs has been regularly bringing publication, policy papers on MSME development.
If bankers are reluctant to provide working capital loans to cash-strapped MSMEs, what is in it for them to fund MSMEs through factoring? If it is fatter fees, commissions or larger discounts, then factoring is a costly proposal for them. Also, when the banking industry is short on capital to lend, financing to MSMEs through either factoring or working capital loans will be limited.
“With regard to any kind of movement of stress in the retail and MSME sector we are very closely monitoring, yes there is a visibility of little bit stress from the past data but it is not alarming,” Jain said in the post monetary policy conference while interacting with reporters. “We are constantly engaged with the regulated entities, particularly the outlier banks and NBFCs.”