Translating it more colloquially as a combination of ‘Niti’ and ‘Niyat’ that works best, Singh said that two major issues being heard the most in today’s time are financial inclusion and employment. “We need to create a system where a person looking to raise a loan knows the reason when a bank refuses to lend. This will help him work on his shortcomings, adhere to compliance and prevent disappointment,” he said. The key partners for the conference included the Ministry of MSME, NSIC and the National SCST Hub- a Ministry of MSME Initiative.
Lauding some of the initiatives taken by the government for the upliftment of this sector, Singh said that as per the data given by Small Industries Development Bank of India (SIDBI), 11 lakh entrepreneurs were given credit under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) from 2010-2014. He further stated that from 2014-2018, 18 lakh entrepreneurs were granted loans which showed positive momentum and also indicated growth in the number of entrepreneurs in the country.
Drawing attention to SIDBI’s Stand-Up India scheme which aims at encouraging entrepreneurship among SC/ST and women, Singh said data suggested that approximately 71,070 loans for SC/ST and 57,897 loans for women had been sanctioned since the start of the scheme. “Till the time women – comprising half the population – will not be included in the employed categories, India’s GDP will not see an increase. This fact has been substantiated by renowned global organisations such as World Bank and McKinsey too,” he said.
Urging bankers to recognise the difference between the varied finance seekers, Singh said that some key aspects need to be understood while disbursing loans. “Banks have to understand, recognise and encourage entrepreneurs who need a loan for their business. However, when those in need go to the bank, a long list of rules and regulations is drawn up and potential borrowers feel discouraged to avail funds,” he highlighted.
Creating a parallel with Micro Finance Institutions (MFI), the Minister said that banks need to introspect why MFIs, despite an interest rate that is 1.5 times more than that of the banks, have 99% recovery as against the latter, which even at 10-12% interest rate witness more NPAs.
Singh also mentioned how it is extremely crucial to take agro-based technology to entrepreneurs and farmers for their benefit. “It will be unfair not to make them privy to such technology. Hence, the department decided to develop such technology as well. It is a key focus,” he said.
Concluding the session which had a diverse set of speakers and industry representatives in attendance, the Minister reiterated the need for financial inclusion as necessary to progress, saying that it should be taken to newer heights in the coming days. “The society should not be at unrest. Banks need to be more flexible so that there can be continual progress and intent can be woven seamlessly in policymaking to meet the common goal,” he added.