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More MSME Credit Plea

Bhubaneswar: The State Government has asked commercial banks functioning in the State to enhance credit flow to MSME units in the districts like Nuapada, Deogarh, Ganjam, Koraput and Jajpur where the achievement is below 35 percent of the annual target.   

According to official sources, banks have sanctioned loans to the tune of Rs 30,132.87 crore to the Micro, Small and Medium Enterprises (MSEMs) till September against the annual target of Rs 59,449.52 crore, thereby registering an overall achievement of 50.69 percent.  

Out of the total credit following to the MSME sector, Rs 12,481.42 crore has been given to micro enterprises, Rs 8,383.79 crore to small enterprises and Rs 9267.66 crore to medium enterprises.

So, the achievement was 41.17 percent in micro enterprises, 45.49 percent in small enterprises and 86.61 percent in medium enterprises sector.

Nayagarh, Balasore, Khurda, Boudh and Jagatsinghpur districts have achieved more than 65 percent of the annual credit plan (ACP) target while Nuapada, Deogarh, Ganjam, Koraput and Jajpur districts have performed poor with below 35 percent of the target.

Similarly, banks like Federal Bank, ICICI Bank, Kotak Mahindra Ltd, UCo Bank and HDFC Bank have achieved more than 60 percent of the annual target while the Orissa State Cooperative Bank, IDFC Bank, DCB Bank Ltd, OdishaGramya Bank and Bandhan Bank have not even able to meet 25 percent of their target set for the current financial year.

In the above contest, Principal Secretary Finance, Vishal Kumar Dev, during the recently held SLBC meeting, has asked the poor performing banks to enhance their credit flow to the MSME sector in the coming months.

Similarly, the performance of banks under the Prime Minister’s Employment Generation Program (PMEGP) is also not satisfactory. At least 2839 applications involving credit requirements of Rs 9348.73 crore are pending with the banks.

Out of 9882 PMEGP applications have been forwarded to the banks, of which the bankers have sanctioned only 2343 applications involving Rs 5810.19 crore. The remaining 2839 applications are yet to be cleared by the concerned banks.

While 14,925 applications are pending with the banks under PM SVAnidhi scheme, 1449 application under State scheme MukhyamantriKrushiUdyogaYojana (MKUY), 60,751 applications under SHG bank linkage and 837 applications under Mission for Integrated Development of Horticulture (MIDH) are pending with the banks.

Mr.Dev expressed his concerns over the huge pendency in Government sponsored schemes and urged all banks to scrutinize and process all applications in a time bound manner.

The performance of the banks in lending credit to the Self Help Groups (SHGs) is also not upto the mark. Till September 30 last, the banks have provided Rs 4273.31 crore to the SHGs against the annual target of Rs 8,750 crore, thereby achieving 49 percent of the target.

The average loan size per SHG is only Rs 2.70 lakh. So, the Finance Department Principal Secretary has directed the banks to enhance the credit size to Rs 4 lakh by 2022-23.

The minimum loan size of SHG to Rs. 2 lakhs for fresh/1st linkage and a minimum loan size of Rs. 4 lakh &Rs. 6 lakhs for 2nd linkage and 3rd linkage irrespective of their corpus fund, he said.

Similarly, only banks like SBI, UGB, OGB, ICICI, Yes Bank, UCO and Union Bank have partnered with Mission Shakti Department to appoint SHGs as Business Correspondent Agents (BCAs). So, the other banks have been directed to sign the MoU with the Mission Shakti Department soon to engage SHGs as BCAs.

Against a target of Rs 52,488.66 crore for the current year, total achievement in the agriculture sector was Rs 29,079.06 crore as on 30.09.2022 which is 55.40 percent of the target.

However, the performance of commercial banks under crop loan is only 46 percent of the total achievement (Rs 16,195 crore) whereas the achievement of only State Cooperative Bank is 54 percent.

Though the total ACP achievement under the allied sector against the target (Rs 6253 crore) is 51 percent, the achievement under dairy, fishery and poultry is only 40.59 percent, 31.55 percent and 48.78 percent, respectively.

The total achievement under other allied categories is Rs 4264 crore against the annual target of Rs 232 crore, which is 1835 percent.      

The performance of HDFC bank (10.74%), Bank of Maharashtra (27.05%), Axis Bank (28.73%) is quite dismal in comparison to other banks. So, the State Government has asked these banks as to why their performance is so poor.