Union Minister for Commerce and Industry, Piyush Goyal on Thursday said the government is open to the idea of an alternate financing model to support micro, small, and medium enterprises (MSME) as well as earmark areas to MSMEs in the 20 townships being built across the nation.

The minister urged the industry to share specific issues they are facing in accessing bank credit, Goyal and said, “If we get that more specific feedback then we will be able to take it up with the bankers.”

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“ECGC (Export Credit Guarantee Corporation) is looking at factor services also but my own personal view is that being costlier, people will still prefer to go to the bank and take a loan but we are open to the idea of alternate financing models,” he added.

Stating that MSMEs are pivotal to supporting large industries in their ecosystem, the Minister noted that he would speak to States to look at providing areas to MSMEs for developing their businesses in townships and industrial parks.

He also added that MSMEs can be provided land at concessional rates to develop their businesses in the townships.

Further speaking on their financial issues, he said “Give me specific details as to what kinds of problems MSMEs face. Is too much collateral being asked? Suppose an ECGC cover is available, do banks still ask for collateral, what kind of interest they charge when a 90% guarantee is taken by ECGC in the event of any failure of export credit?”

On setting aside areas for MSMEs in industrial townships, he said: “I am happy to commit to a particular area earmarked for MSMEs because without MSMEs no large industries will survive. If Toyota is investing Rs 20,000 crore in one of our industrial cities at Shendra-Bidkin at Sambhaji Nagar (Maharashtra), clearly they will need 100s of MSMEs in their support ecosystem.”

On rising consumption patterns of the country, the Minister highlighted that India must become a developed nation on the back of sustainability. We can’t encourage waste, he said.

Piyush Goyal was speaking at the Assocham: Bharat @100 Summit on the theme of “Fuelling Bharat’s Global Rise”.