‘Entrepreneurs can get loan without collateral security’

Entrepreneurs planning to set up micro-small enterprises need to come forward with viable proposals for the banks to be able to extend advances under the Credit Guarantee Trust for Micro, Small Enterprises Scheme (CGTMSE), bankers said.

Addressing an awareness programme on the subject for entrepreneurs from Visakhapatnam, Vizianagaram and Srikakulam here on Friday, the bankers explained the details of the scheme. Under the scheme the entrepreneurs could avail bank loans from Rs 5 lakh to Rs 1 crore without collateral security. "What is crucial is not the absence of demand for collateral but the viability of the project and the trust you build with the banker,” SBH Deputy General Manager K. Ramesh Babu said and urged the entrepreneurs to also establish backward and forward linkages as they are very important for the viability of the project.

“The SBH has declared 2013-14 as the year of the MSMEs and set apart Rs 9,000 crore for the purpose. In Visakhapatnam, we have financed 238 units to the extent of Rs 14 crore and we have also taken up a novel scheme. We have identified certain schools, attaching one school to each branch, and we are helping the needy students with notebooks and textbooks. Besides, we are also giving loans to the parents of the poor students. We have so far lent Rs 9.8 crore and given 1,414 loans," he said. The recent political uncertainty had affected the credit offtake to some extent, he added.


The Canara Bank had introduced two schemes specifically for MSMEs - MSE Pragati for loans less than Rs 10 lakh and MSE Unnati for loans above that limit, Canara Bank DGM V. Jaya Kumar said. The bank was going to organise MSME Expo in the YMCA hall here on December 13 and entrepreneurs could make use of it, he added.

SBI AGM Y. Koteswara Rao said the technical and economic viability was not the main problem, but marketing was proving to be a major one. Many enthusiastic entrepreneurs were coming to grief on the count and therefore they should be more careful in choosing projects.

DGM of Bank of India G. Viswanadh advised the entrepreneurs to get their projects rated by an external agency and get the interest reduced by 0.5 per cent to 1 per cent. At present, the banks in general were charging 13 per cent for MSMEs. DGM of Bank of Baroda Yogeswara Rao explained the schemes offered by his bank.

Participants complained that in spite of the assurances given by the high-ranking officials many branch managers were not eager to lend without any collateral security under the scheme. B.V Rama Rao of Federation of Andhra Pradesh Industries was also present.

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