PHDCCI and BMWA Hosted Webinar on Government Credit Support Measures for MSMEs

New Delhi, India – The MSME Committee of PHD Chamber of Commerce and Industry (PHDCCI), in collaboration with Bawana Manufacturers Welfare Association (BMWA), organized a webinar on ‘Govt Credit Support Measures for MSMEs - During COVID Pandemic and SIDBIs New Schemes’. Senior members of the PHD Chamber and other industry stalwarts from across India attended the session.

MSMEs Challenges

In his welcome address, Sanjay Aggarwal, President, PHD Chamber, highlighted the challenges faced by MSMEs despite their significant contribution to the economy. The challenges, like physical infrastructure bottlenecks, constraints on technology adoption, high logistic costs, and a lack of credit, have all been exacerbated for MSMEs because of the pandemic, according to Aggarwal. Loan availability of adequate and timely credit is a serious problem that MSMEs are currently facing. To address these liquidity issues, the government has announced credit support through the Aatmanirbhar package. Finally, he discussed the schemes devised by SIDBI under the guidance of the Union Government that facilitate funding for production and services related to the supply of oxygen cylinders, oxygen concentrators, oximeters, and essential drugs.

Anil Khaitan, Former President, PHD Chamber shared his practical insights over the difficulties and challenges faced by MSMEs. He also talked about the revolutionary FinTechs which streamline the process of credit availability for MSMEs and are quick at processing the loan applications.

Mohit Jain, Chair, MSME Committee, PHD Chamber, briefed everyone about the PHD Chamber’s MSME Mentoring and Guidance Centre, which has been proactively engaged in providing value-added services with complete handholding and mentoring support to needy MSMEs.

Rajeev Kumar Goel, President, Bawana Manufacturers Welfare Association (BMWA) in his address, emphasized how the COVID Pandemic has had a significant impact on the MSME sector, causing additional issues with credit financing. He talked about the importance of a time frame in loan disbursement for micro and small industries. He proposed that financial institutions provide professional assistance to MSMEs during these difficult times by visiting industrial clusters and associations to raise awareness of various schemes and provide documentation assistance.

Cluster Development

Dr R K Bharti, Joint Director, HOO, MSME-DI in his address, assured the MSMEs of the assistance they require during these difficult times. He updated the delegates and participants on the latest developments in the Delhi cluster development. According to Dr Bharti, Delhi State Industrial Development Corporation (DSIDC) has allotted land for cluster development in Bawana and Badli Area, which will aid in the overall development of industries during these times.

S S Acharya, General Manager, Small Industries Development Bank of India (SIDBI), in his address, stated that the long-term future is where the fundamentals of India’s growth lie. He mentioned that MSMEs must continue to plan and move forward in a positive direction. He discussed the government’s and SIDBI’s schemes for assisting MSMEs. He also mentioned the cluster development fund established for MSME development and promotion per the recommendations of the U K Sinha Committee and with assistance from the Reserve Bank of India. The goal of this scheme will be to assist state governments and state government-sponsored organizations MSMEs in creating infrastructure for MSME cluster development.

SIDBI Schemes

Acharya also presented various SIDBI schemes for quick credit delivery, including SAFE (SIDBI Assistance to Facilitate Emergency Response Against CoronaVirus), SHWAS (SIDBI assistance to Healthcare Sector in War Against Second wave of COVID-19), and AROG (SIDBI Assistance to MSMEs for Recovery & Organic Growth During COVID-19 Pandemic). The SHWAS and AROG schemes envision 100 percent funding of up to INR 2 Crore to an MSME unit at an attractive interest rate of 4.50 pc-6 pc pa, within 48 hours of receipt of all documents/information. Given the current distress caused by COVID-19 and the fact that it is a national emergency, SIDBI has devised these schemes to assist healthcare providers in their fight against the pandemic.

Dr H P Kumar, Advisor, PHD Chamber, and Former CMD, NSIC, discussed the issues that the sector faced during the pandemic, including increased liquidity constraints, payment of fixed expenses, and decreased orders, which resulted in payments not being made, causing further credit problems for them. He also proposed different schemes for assisting MSMEs, such as those devised by SIDBI for quick credit delivery, namely SHWAS and AROG, and an INR 50,000 crore line of credit provided by the RBI to MSMEs to facilitate liquidity.

Financing Issues

He also stated that banks must be proactive in their processing. There is a need for a centralized, transparent portal for loan tracking and processing. He also suggested that MSMEs register with GeM, which allows them to become government vendors, gain access to government tenders, and increase their credibility. Finally, he proposed that a digital system mechanism that assists one in accessing proper evidence and documentation available on digilocker can reduce the time lag in delayed payment resolution and settlement.

Ritesh Jain, Deputy Vice President, M1xchange, gave an informative presentation on M1Xchange about the process of transparent financing for MSMEs. He discussed the struggles that MSMEs face to stay afloat due to a lack of working capital. M1Xchange is a digital platform that deals in TReDS (Trade Receivables Discounting System), with the goal of improving the flow of funds to MSMEs by shortening receivables realization cycles. According to Jain, the platform enables SMEs to post their receivables into the system and get them financed.

Additional Government Support

Karun Kumar, Assistant Director, MSME-GOI, spoke about the government’s CHAMPION portal, which was launched to address grievances and encourage, support, help, and handhold MSMEs. He also advised MSMEs to take advantage of the government’s Public Procurement Policy. According to him, the policy’s 25 percent criteria of procurement of goods and services includes 4 percent of total procurement of goods and services from MSEs owned by SC & ST entrepreneurs and 3 percent of total procurement of goods and services from MSEs owned by women entrepreneurs.

Dev Prakash Goel, Co-Chair, MSME Committee, PHD Chamber, delivered the closing remarks to all the distinguished panelists.

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