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Banks await report of state government to extend credit to MSMEs

In the wake of the Vibrant Gujarat Global Investors’ Summit 2009,nationalised banks in the state were asked to extend credit to micro,small and medium enterprises (MSMEs).

Written by Express News Service | Ahmedabad | Published: February 16, 2009 12:06 am

Govt is yet to provide them with names of entrepreneurs who pledged investment during VGGIS

In the wake of the Vibrant Gujarat Global Investors’ Summit 2009,nationalised banks in the state were asked to extend credit to micro,small and medium enterprises (MSMEs).

But even as a month has gone by since then,the state government is yet to provide them with the list of the entrepreneurs who had pledged investment during the summit.

The banks have decided to lend Rs 5,000 crore to the MSME sector across Gujarat and they are waiting to take the drive off the ground. M K Jain,general manager of the Dena Bank,who is also the convener of the state-level bankers’ committee (SLBC) said compiling the list is an enormous task in view of the large number of MoUs signed during the summit.

SLBC,meanwhile,will collect MSME credit data from banks by 5th of every month,hold a review meeting and send its report by February 15 to the Ministry of Finance.

The response to the first review meeting was limited because of the shortage of time. Only about a dozen banks could come up with the details.

“The MoUs signed at the summit were not all new proposals. The projects were in different stages of implementation and they might require credit to expedite their operations either immediately or after some time,” Jain said. “We are ready to help them who need credit right away and go on stream. But the delay in getting the list is delaying banks’ lending decisions also,” he added,expressing the hope that the work would be taken up on an urgent basis.

Meanwhile,according to data available from 12 nationalised banks with SLBC,4,756 new MSME accounts were opened since September 2008 and they were extended credit worth Rs 1,309 crore. They also say the amount of Rs 543 crore was lent to 1,538 existing units during that period. In January this year,225 existing units got loans for Rs 217 crore.

A major debt restructuring has been made since September last year involving Rs 405 crore debts of 1,165 units. Jain said Dena Bank alone had restructured Rs 316 crore worth debts of 239 accounts.

Principal Secretary (Industries),Maheshwar Sahu,was not available for comment,but on an earlier occasion,he had admitted that the list was yet to be compiled.

“The list of the companies is being compiled. As soon as the process gets over,we will also put up the list of the companies which have signed the MoUs,” Sahu had said.

The VGGIS (2009) website (http://www.vibrantgujarat.com/mou-1-2009.html) quotes the number of projects,the sectors in which MoUs were signed,the proposed investment and the employment it generates.

The site,however,is silent on the list containing names of entrepreneurs.

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