In order to boost micro, small and medium enterprises, the Reserve Bank of India has directed all banks to provide 60 per cent credit to micro units out of the total loans extended to micro and small units.
"We want to encourage more and more micro units to come up in the country. Thus we have made it mandatory for all banks to provide 60 per cent credit, out of the total loans extended to MSMEs, to micro units," RBI's Chief General Manager, Amarendra Sahoosaid on Wednesday.
Sahoo said that the RBI had also increased the limit of collateral-free loans for MSMEs from Rs 5,00,000 to Rs 10,00,000. "The base rate module imposed by the RBI will enable to increase credit flow to small borrowers at reasonable rates, thus encouraging MSMEs," he said.
Union Minister of State (Independent Charge) for MSMEs, Dinsha Patel, said that the Government would extend full support for encouraging MSMEs in the country.
"Prime Minister Manmohan Singh has said that the GDP is likely to grow 8 per cent. This could be achieved only if more and more small-scale industries, which could generate employment, come up. The Government is ready to provide all necessary assistance to such enterprises," Patel said.
