Ministry of MSMEs includes uniformity of loan applications in draft policy to improve access to finance
New Delhi, 15 Feb. (KNN) In order to improve the access of MSMEs to financial assistance, the draft national policy proposed the introduction of uniformity and simplification of the different loan application formats and the evaluation process in line with lessons learned. supply chain finance.
The gap between credit and MSMEs has widened further due to the pandemic, so it is safe to say that financial aid is one of the most important aspects for MSMEs to function, recover and progress.
Given the urgency of improving access to financial services for MSMEs, he also specified to initiate the development of customized products to assess financing needs based on expected cash flows and use details such as personal guarantee, bank statement, GST data, standardized scorecards to assess creditworthiness of MSME borrowers.
Also one of strategies formulated by the ministry.
In addition to the PSB Loans In59 Minutes portal, he also suggested developing facilities for new entrepreneurs while increasing the loan limit to Rs 5 core.
In addition, the draft policy recommends ensuring that all requests granted in primary approval are processed within 7-10 days.
With these measures, the government aims to increase accessibility to finance for a range of activities such as productivity, marketing and technological upgrading caused by information asymmetries, higher risks, transaction costs important and a lack of adequate safeguards.
Through these initiatives, it also intends to counter the negative attitude displayed by MSMEs towards equity financing, and their inability to make the best possible use of available financing resources.