While MSME Minister Nitin Gadkari dreams of enlisting the services of the global e-commerce giant Amazon or building a marketing portal called ‘Bharat Craft’ on the lines of China’s Alibaba for boosting MSMEs, the co-operative banking sector is aghast at its exclusion from the scheme of the Emergency Credit Line Guarantee Scheme (ECLGS), announced to support MSMEs.
Despite several representations from the cooperative bodies and its leaders, the govt ignored their plea even in the latest tweaking done recently. While most of the micro and small businesses are borrowers of UCBs, their exclusion from the scheme is nothing sort of blatant discrimination, echo co-operators.
The disappointment of the sector was best captured by Senior Co-operator and Sahakar Bharati leader who wrote on social media “Sadly the entire CoOp Banking still remains excluded from the Scheme despite the fact their total exposure to Priority Sector Lending exceeds 50%.”
“Even Joint Representation by Sahakar Bharati, NCUI, NAFSCOB, NAFCUB & NCDC has fallen on Deaf Ears. It is high time the BJP & PMO intervened and corrected the aberration” Marathe wrote adding, Not Enough!
Recently, the scope of the Rs 3-lakh crore MSME credit guarantee scheme was widened by doubling the upper ceiling of loans outstanding to Rs 50 crore and including certain individual loans given to professionals like doctors, lawyers and chartered accountants.
The overall ceiling for the scheme remains at Rs 3 lakh crore and the validity of the scheme is till October. On May 20, the Cabinet approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 percent through ECLGS for the MSME sector.
Addressing FICCI, Union Minister Nirmala Sitharaman recently said that banks cannot refuse credit to MSMEs covered under emergency credit facility and she would like to look into such cases.
Responding to media reports that the central govt is likely to include cooperative banks as a lending institution under the emergency credit line guarantee scheme (ECLGS), MSME minister Nitin Gadkari said a decision will soon be taken in the matter.
Gadkari admitted that Cooperative institutions play a crucial role in financial inclusion in both rural and urban areas. “But even Gadkari’s 3-4 months efforts to include co-op banks into the ECLGS scheme is yet to bear fruit, a close associate of Gadkari revealed.