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The Odisha government has offered to provide Rs 100 crore to the Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE).
The state MSME (micro, small & medium enterprises) department has sent a proposal to micro units lender Small Industries Development Bank of India (Sidbi) in this connection.
“We have intimated to Sidbi on our readiness to provide Rs 100 crore to CGTMSE. The purpose is to create a special fund scheme for MSEs in Odisha. Our financial support to CGTMSE would help expand the ambit and coverage under CGTMSE,” said a senior government official.
Commercial banks in Odisha have extended loans of Rs 783.83 crore to micro and small enterprises (MSEs) in 2014-15 under the CGTMSE scheme of the Centre.
As per available data, Rs 783.83 crore loans have been approved to 14,845 units in the state under the collateral free scheme. Cumulatively, Rs 3,832.14 crore has been sanctioned to 91,462 units.
Bank-wise analysis says that the country’s largest public sector bank, State Bank of India (SBI) has sanctioned the highest quantum of Rs 221.58 crore to 3,796 accounts followed by Bank of India with Rs 172.01crore loan to 2,802 MSE units.
Odisha ranks eighth among all states in India in respect of MSME coverage under the CGTMSE.
The Union ministry of MSME and Sidbi have set up the CGTMSE to operationalise the Credit Guarantee Scheme (CGS) so as to strengthen credit delivery system and facilitate flow of credit to the MSE sector. Under the scheme, collateral free loans are provided to MSEs.
The main objective of the scheme is that the lender should give importance to project viability and secure the credit facility purely on the primary security of the assets financed. The other objective is that the lender availing guarantee facility should endeavour to give composite credit to the borrowers so that the borrowers obtain both term loan and working capital facilities from a single agency.
Under the scheme, the guarantee cover available is restricted to credit of Rs 1 crore even though credit extended is more than Rs 1 crore to an eligible borrower. CGTMSE provides guarantee cover up to 75 per cent of the amount in default subject to a maximum of Rs 62.50 lakh
The extent of guarantee cover is 80 per cent with a maximum of Rs 65 lakh in cases of MSEs operated and owned by women and all loans sanctioned in the North East Region (NER). For micro enterprises, the extent of guarantee cover is 85 per cent for credit up to Rs 5 lakh.
