| On the sidelines of a press conference on Sidbi's tie-up with Indian Bank to co-finance projects, N Balasubramanian, chairman and managing director, Sidbi, said that the collateral free loan given up to Rs 25 lakh was becoming popular. |
| He said that the portfolio registered slow growth earlier due to knowledge gap amongst the customers about this facility and also because the bank did not market the initiative. |
| He also pointed out that he expected, P Chidambaram, finance minister, to make an announcement on concessional interest rates for the small and medium enterprises (SMEs) in the next couple of days. |
| Balasubramanian said that there were two major problems faced by small and medium enterprises; the first one being credit availability and the next was large non-performing assets. |
| In this regard, the government and the Reserve Bank of India were also finding ways of increasing the credit flow to the SME sector as they provide large employment, he added. |
| While the top rung of SMEs like the knitwear cluster in Tirupur avail themselves of loans at competitive rates, the middle and lower segments of SMEs do not get funds at cheaper rates, he said. |
| Balasubramanian said, "Therefore, we are promoting cluster development wherever possible so as to enhance credit flow as well as mitigate business risk." |
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