State government is growing in MSME as it has created a suitable ecosystem: SBI Chief GM

Praising the state government for its growth in the MSME sector, Chief General Manager, State Bank of India Partha Pratim Sengupta attributed the growth to the creation of a proper ecosystem.

"Though the investment in corporate sector is minimum, the state government is growing in MSME as it has been able to create the ecosystem. This ecosystem, if it works properly, managing of finances becomes easier," Sengupta said.

He expressed concern over the high percentage of NPA on Bengal and said that the bank is trying to address the issue on a priority basis.

"NPA percentage in Bengal which is as high as 16 percent is a cause of worry. We are trying hard find a solution to address this. We are launching a pilot project titled "Project Vivek" - a new system of assessment in which companies that will be seeking loans worth more than Rs 50,000 will be assessed through cash flow method and not by balance sheet method which is being followed as of now. This procedure will simplify things," Sengupta said on the sidelines of 8th National MSME conference on "MSME Financing and Strengthening MSME Linkages" organised by ICC on Thursday.

 Elaborating on the new method, he said that the companies will be rated on the

basis of a questionnaire and bank statement of the company.

"Those who will be acquiring high ratings will have low interest rates," he said adding that SBI has contributed 33 percent of the total SME advance in Bengal.

Vijay Bharti, Director of state MSME department mentioned that financing is the core issue that the MSME sector faces as a major obstacle in their growth path. He stated that the MSME sector comprises approximately around 95 percent small, 4 percent of micro and around 1 percent of medium enterprises. While speaking about the major bottlenecks that the MSME segment faces in India, Vijay mentioned about trust deficit between the financing authority and the MSME borrowers. He stressed on the formation of committees for analysing bankable projects which will lessen the difficulties in approval of projects and will further help in empowering the MSMEs.