Rural MSMEs in urgent need of funding, says MSME Export Promotion Council

The MSME Export Promotion Council (MSMEEPC) has suggested banks to be more aggressive in reviving Micro, Small, and Medium Enterprises (MSMEs) that have been struggling for survival after Covid. As compared to the MSMEs located in metro and urban cities, the units in the rural areas, especially art and craft and agro-based units, are struggling more for their survival.

"There is an urgent need for developing alternative sources of funding to solve availability of timely, competitive credit," MSMEEPC chairman D S Rawat told PTI.

He said that the "biggest challenge to the MSMEs is unavailability of timely capital. As a result, they suffer from either shrinking of operations or liquefying the enterprise itself".

Therefore, it is necessary to broaden the range of financing instruments available to MSMEs in order to continue their contribution in investment, growth, innovation, inclusive development and job generation, Rawat added.

He said the government should promote and encourage fintech services, as technology has been helpful to customers in reducing the dependency on banks. If fintech services are effectively implemented, every year at least 50 lakh additional jobs will be generated in this sector and an equal number of indirect jobs.

He said that the global fintech investment is reportedly growing at the rate of 15 per cent annually and by the end of 2021, it has already touched USD 50 billion.