Govt. to set up microfinance corporation for MSMEs

Session on special industries held as part of ‘Kerala Looks Ahead’ international conclave

The government plans to set up a microfinance corporation to exclusively take care of the requirements of micro, small, and medium enterprises (MSMEs) in the State and to expand the activities of the Kochi-based Kerala Institute of Entrepreneurship Development on the lines of the Entrepreneurship Development Institute of India, Ahmedabad.

Principle Secretary (Industries) K. Ellangovan told a session on special industries organised as part of the ‘Kerala Looks Ahead’ international conclave, that the State focussed on preparing the ground to let MSMEs flourish. He said that about 90% of all the enterprises in the State were in the SME sector.

The microfinance corporation will be backed by the State government, which had agreed to provide ₹100 crore as the initial corpus for setting it up.

The formation of the microfinance corporation will take forward the initiative of the State to encourage micro and small enterprises. The State had come to the aid of the micro, small, and medium enterprises with a subsidy support for the land acquired for the enterprises, he added.

Increasing employability

The entrepreneurship development institute would also bridge the gap between the educational institutions and the requirements of the enterprises in the State. Increasing employability was a major issue, he added.

The key role played by the MSMEs prompted the State government to come forward to amend Acts and rules to smoothen the process of obtaining licences and permissions for setting up units in the State, he said.

Mr. Ellangovan said that the 2019 MSME Facilitation Act had helped more units to take advantage of the conducive atmosphere. “We shifted from the questioning model to the model of trust,” he said about the Facilitation Act, which took the investors into confidence by accepting their declaration that no rules had been violated.

Mr. Ellangovan added that over the years, Kerala State Industries Development Corporation (KSIDC) had provided loans to the tune of ₹3,000 crore to a total of 4,700 units. Over the last four years, the volume of loans had been ₹232 crore.

The government wanted to encourage more research and development in industries and had decided to reserve 5% of the space available at all industrial parks to be dedicated to research and development activities.