KASSIA Asks Govt To Provide Soft Loans To Msmes At 4%

Bengaluru, Dec 22 (KNN) To double MSME contribution to India's GDP, Karnataka Small Scale Industries Association (KASSIA) has suggested the central government to announce soft loans at 4 per cent interest to the small industry.

The association said this in response to Union Ministry of State for MSME, Bhanu Pratap Verma's statement made at an industry forum recently.

Welcoming the Minister's stand on doubling the contribution of the MSMEs, K.N. Narasimhamurthy, President, KASSIA observed,“It is possible only if the Centre incentives the sector's growth by providing it timely financial assistance at 4 per cent like how the government funds the farm sector.”

Narasimhamurthy pointed out that one of the biggest challenges for a micro or a small entrepreneur is to compete in stiff competitive market which entails operating with small margins.

“Adding to this problem is the fact that a majority of the MSMEs are contractually bound to not increase the price of their supplies,” he said.

In the current context where there is a marked increase in input costs, there is much pressure on their margins.

“So if they can access funds at lower interest like 4 per cent it will help to protect their margins and help to survive in the market,” opined KASSIA's chief.

“Otherwise, many of them might decide to close down temporarily or even permanently as they cannot sustain their overheads,” he stated.
(KNN Bureau)

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