Meanwhile, the Orissa government has been requested to extend infrastructural support to develop clusters for increasing the credit flow to the SME sector.
It is decided that various line departments of the state government and the banks would jointly work out the details of the initiative.
Besides, the banks are expected to take coverage under the Credit Guarantee Fund Trust Scheme for Micro and Small Enterprises (CGTMSE) in a big way.
Though 5,547 proposals involving Rs 86.63 crore were approved by the banks under CGTMSE till December, 2007, the average loan size is only Rs 1.56 lakh. It is much lower than the average of Rs 2.78 lakh for the country as a whole.
It may be noted the credit provided by the banks to the MSME and SME sectors is 7.22 and 14.32 per cent of the net bank credit, respectively. The government has all along been urging the banks to lend more to this sector in view of the employment potentiality.
The State Bank of India (SBI), the largest public sector bank, having 538 branches in Orissa, is on the forefront of SME financing. It has a vibrant SME department to cater to the requirement of this sector.
The bank has an internal mechanism for identification of sickness in the small and medium enterprises (SMEs) and their rehabilitation in the state. As a pioneer initiative, it has already introduced special mention accounts for this sector which takes care of the requirement of the SMEs.
"Efforts are made to provide all the required assistance including restructuring, provision of additional finance for the potentially viable units in the SME sector. Stressed Assets Resolution Centre (SARC) has been set up in Cuttack and Bhuabneswar, specifically to take care of the non-performing accounts", M N Rao, chief general manager (CGM), SBI, Bhubaneswar circle told Business Standard.
That apart, the bank has also set up 5 Small and Medium Enterprise Credit Cell (SMECC) in Bhubaneswar, Cuttack, Berhampur, Rourkela and Sambalpur to look after the credit requirements of the SME units. SMECCs sanction loans, monitor the disbursements, and follow it up later on. Further, to expedite the credit disbursals, those units are headed by officers in the rank of Assistant General Managers (AGMs).
Meanwhile, fifteen banks including Baitarani Gramya Bank have adopted different clusters in the state. The State Bank of India (SBI) has adopted seven clusters including brass and bell metal cluster at Rengali, Balakati, Baidyarajpur and Jajpur Town; weaving cluster at Siminai; rice mill cluster at Kalahandi and Nuapara; cashew processing cluster at Jeypore.
It has also adopted opera dress with Jari and Buti cluster at Haripurhat (Jajpur Town), Pattachitra; palm leaf art work and silver filigree works at Dandasahi and Raghurajpur.
Similarly, the Small Industries Development Bank of India (SIDBI) has adopted 5 clusters like foundry and machinery cluster in Rourkela; Pharmaceutical cluster in Cuttack and Bhubaneswar; applique cluster in Pipli; handloom and stone carving clusters in Khurda.
Public sector Allahabad Bank has adopted four clusters in the state which includes Handloom and rice mill cluster at Baragarh; sponge iron and foundry cluster in Sundergarh; sponge iron and engineering in Jharsuguda and engineering and pharmaceuticals cluster in Cuttack.
While Union Bank of India has adopted cashew processing cluster in gajapati, ganjam and Koraput, it has adopted rice mill cluster in Baragarh. Utkal Gramya Bank has adopted small retail trade and small business enterprises in Sundergarh, Jharsuguda, Sambalpur, Baragarh, Bolangir, Kalahandi, Nuapada, nawarangapur and Koraput.
The Dena Bank has adopted a bio-sourcing cluster in Baliguda and the Baitarani Gramya Bank has adopted a handloom cluster at Baripada. That apart, UCO Bank, Bank of Baroda, United Bank of India and Punjab National Bank have also adopted different clusters.
"We have always achieved the target set for the SME sector lending. If viable proposals come from the District Industries Centre (DICs) and incorporated in the District Credit Plan (DCP) we can lend still more", R K Mukherjee, general manager, UCO Bank and the convenor of the State Level Bankers Committee (SLBC), Orissa said.
Mukherjee said, there is no dearth of funds but higher credit flow to this sector will depend upon the increase in the absorption capacity of the SME sector. The government can play a vital role in improving the rural infrastructure for increasing the absorption capacity of the SME units.
The cumulative advance of the banks operating in the state was Rs 2,570 crore in 2005-06. It increased by more than 54 per cent to Rs 3,980 crore by the end of 2006-07. It further increased to Rs 5,370 crore by December 2007, which is 14.32 per cent of the net bank credit.
