As if listening to RBI Director and senior co-operator Satish Marathe’s views on the issue of UCBs’ loans to MSMEs, the union govt has decided to include non-scheduled urban and district central cooperative banks to facilitate access to finance for the MSME sector.
Announcing this Union MSME Minister Nitin Gadkari said “The inclusion of scheduled and non-scheduled urban cooperative banks and district central cooperative banks in these schemes will spread the outreach and easy access of credit,” PTI quotes.
Speaking on the occasion of the third Ekanath Thakur Memorial Lecture in Mumbai, Satish Marathe had said the future of co-op banking depends to a considerable extent on its engagement with the MSME sector.
Union minister Gadkari said it will create uniformity and competitiveness across lenders in the financial sector, as borrowers will have the option to choose the lender.
Gadkari had met the Union Finance Minister and CMDs of PSU Banks to discuss issues arising out of stressed loans to MSMEs. One of the major challenges faced by MSMEs is in restructuring stressed loans due to the sector related problems or issues with the large industries to which they supply.
Discussions were also held with Banks on increasing the reach of the Credit Guarantee scheme. The Government 
has set a target of increasing credit guarantee to Rs. 50,000 crore under this scheme, which is a jump of about 67% over the last year.
The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) aims to make available collateral-free credit to the micro and small enterprise sector. Both the existing and the new enterprises are eligible to be covered under the scheme.
Talking about the future of UCBs Satish Marathe said future areas of operations for the UCBS are- SMEs and women SHGs, where huge business opportunities await the sector.
“One of the reasons why co-operatives in India have failed to grow in the last 30-40 years is our inability to come up with new generation co-ops as is the case with the developed nations”, Marathe reasoned.
“There are 58 lac SMEs and they contribute 50 per cent to the country’s GDP. There is a need not only to finance them but also hand-hold them. A country of 130 crore would be needing to produce much more and together we can have a win-win situation both for SMEs and UCBs”, Marathe felt.
Similarly, women self-help groups could be a source of huge business activities, says Marathe. There are 87 lac SHGs in the country which are being managed by just five thousand NGOs. Co-op needs to step in and give them finance and skill igniting numerous economic activities across states.
