Credit and Finance for MSMEs: Prime Minister's Employment Generation Programme (PMEGP) — the credit-linked subsidy scheme to encourage self-employment through setting up of micro businesses is likely to support 80,000 micro-enterprises in the current year, said a statement by the MSME Ministry. MSME Minister Nitin Gadkari and Finance Minister Nirmala Sitharaman met top heads of top all banks on Wednesday to review key schemes of MSME Ministry which generate large numbers of jobs with low capital investment. The programme, which offers subsidy up to 35 per cent through the ministry for loans up to Rs 25 lakhs in manufacturing and Rs 10 lakh in service sector has already provided loans to "over 46,000 units in the current year by the various banks and additionally 22,000 loan applications have also been sanctioned and are awaiting disbursement," the ministry said.
The government also urged banks to give loans in "such approved cases immediately" even as banks were requested to "take up about 1.18 lakh pending loan applications" latest by March 15 focusing on North Eastern Region (NER). During the meeting, the Chairman and Managing Director of banks confirmed clearance of such pending cases by March 15. However, for the rejected applications, 11 per cent were applications were dropped because local banks had achieved targets under PMEGP.
To solve this issue, banks were asked to increase lending under the scheme and increase the minimum target limit to ensure all applications are approved for sanction of loans. Another 11 per cent applications were rejected because the "applications received by the banks were outside their service jurisdiction," the statement added. The government asked banks to set-up a system wherein such applications are automatically transferred to respective branches. The number of micro-enterprises supported in the last financial year were over 73,000 businesses. The two ministers also discussed with banks on enhancing the credit guarantee to Rs 50,000 crores under the Credit Guarantee scheme — up around 67 per cent from the past year.