PMEGP in TN hit due to banks delay in sanctioning loans

Chennai:

The Prime Minister’s Employment Generation Programme (PMEGP), a credit linked scheme that is  implemented by Khadi and Village Industries Commission (KVIC)  to nurture first generation entrepreneurs, has been hit with banks being slow in disbursal of loans.

The issue was highlighted during the state level workshop on PMEGP, which  is one of the important schemes of Ministry of Micro, Small and Medium Enterprises. The scheme is implemented by KVIC which is the nodal agency at national level while at the field level, the State Offices of KVIC, State Khadi and Village Industries Boards (KVIBs), District Industries Centres (DICs) are the Principal implementing agencies.

While top officials including commissioner of industries and commerce Swaran Singh and MSME secretary K Dhanavel did not come out openly in criticizing the banks, a Tamil Nadu Khadi Village Indistries Board official T Muthulingam put it bluntly by asking the banks to clear the applications to improve the state board’s target.

Interestingly, the delay in sanctioning of applications has also drawn the ire of Reserve Bank of India. S Raja, general manager of RBI, Chennai, said that he has asked the banks not keep the applications pending. He also highlighted that the applications particularly in Ariyalur, Salem, Nilgiris, Tiruvarus, Trichy, and Dindigul has been delayed while urging the bankers who were also present in the event to clear it soon.

As per statistics available, a total of 3,539 applications have been sent to the banks for loans. The banks however, sanctioned only 1,266 applications.

D R Sree Prakash, assistant general manager of Indian Overseas Bank  vowed that banks will ensure that Rs 1,379 crore  target set by the state would be met.

Speaking on the occasion, Dhanavel also highlighted that in Tirunelveli district the state found it difficult to provide  relief to the drought hit farmers in Tirunelveli district under direct beneficiary scheme as 90 per cent don’t have  bank accounts.  Interestingly, this also highlights that the ‘no-frills account’ initiative has yet to reach the nook and corner of India.

Dhanavel said that MSME sector plays a key role in helping realize the state government’s role of creating 15 lakh jobs by 2023.

Meanwhile, it is estimated that Rs 23,400 crore is the estimated total credit flow in the scheme for setting up of micro enterprises across the country and rs 7,800 crore government subsidies will be provided during the 12^th plan.