Paradigm shift for co-op banks in West Bengal

West Bengal Chief Minister Mamata Banerjee has put it upon the cooperative banks to finance the lakhs of MSMEs in the state and develop them into credible export houses.

Co-op banks in the state were earlier asked to support PACS and treat them as their extension counters in the state. A monitoring Panel led by the Chief Secretary was earlier constituted to streamline the functioning of co-op sector.

Having done that to some extent, the CM now wants co-op banks to come to the aid of small and medium sector. Co-op banks which has been distributing Kisan Credit cards so far would have to come with novel card to take care of this sector, something like MSME Card, joked a local cooperator.

Mamata is, however silent on the issue of refinance of these co-op banks. Primarily concerned with agriculture loaning how these banks would get fund to support MSMEs is a moot question. NABARD-the body which refinance these banks have strict guidelines for agri-financing.

She is traveling to Germany next month to find buyers for them.

West Bengal Chief Minister Mamata Banerjee has called for greater financial assistance to the MSME (micro, small & medium enterprises) sector and asked the State cooperative banks to look for ways to increase lending to them.

According to her, demonetisation and the GST rollout have depleted the working capital of the MSMEs. It has also become more difficult to obtain bank credits, she said.

“Bank credit has to go up. I urge the State cooperative banks to see if they can explore credit options for MSMEs,” Banerjee said, while inaugurating the two-day State MSME Conclave here on Monday.

Nearly ?1.74 lakh crore worth of bank credit has already been extended to the sector over the last seven years, a government brochure said. State cooperative banks, who already provide loans through Kisan Credit Cards, could explore similar options for MSMEs.

Bengal currently has 53 lakh MSME units, employing about 1.1 crore people. Nearly 28,000 new MSMEs are set up every year in the State.

Focus on exports

According to Banerjee, MSMEs should focus on promoting exports. New markets such as Europe can be explored. State government officials too need to work in tandem with the micro, small and medium-level entrepreneurs in order to promote exports and help them gain access to international markets. The State government, in association with various sector specific export facilitation centres, is looking to push MSME exports. Government data pegs MSME exports from the State at ?62,000 crore.

“Think of the future and develop products that will cater to the export markets. There is a huge growth opportunity there. The State government officials will help you out as and where necessary,” she said.

Banerjee will be travelling to Germany next month to seek investments in the State.