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The role of Micro, Small and Medium Enterprises in all type of economies is well recognized. The same is more prominent in case of developing and emerging economies where MSMEs are considered as growth engines. Worldwide MSMEs contributes significantly in employment generation, equal distribution of national income, optimum utilization of local resources, poverty alleviation, rural development as well as mobilizing capital lying in the hands of private sector. MSMEs are integral part of the supply chain of large scale industries and provide vital forward and backward linkage to the overall industrial sector.

The sector contributes enormously to India's economic development and growth. The sector therefore offers an opportunity to the country to harness local competitive advantages for achieving global dominance. The importance of MSMEs in India is evident from the fact that MSME sector contribute around 9% in National GDP, about 45% in manufacturing output and 40% in total export of the country.

In recent years, Government has announced the following initiatives for development of MSMEs:

  • Establishment of a Trade Receivables discounting System (TReDS), which will be an electronic platform for facilitating financing of trade receivables of MSMEs
  • Establishment of SETU (Self-Employment and Talent Utilization) as Techno-financial, incubation and facilitation programme to support all aspects of Start-up business.
  • A national skill mission to consolidate skill initiatives spread across several Ministries.
  • In order to make MSME companies more viable, income tax for companies with annual turnover upto Rs. 50 crore reduced to 25%.
  • Credit support to MSMEs and encouragement to digital transactions.

MSME Finance is a thrust area of lending for our Bank. Bank is actively participating in Government initiated schemes like Prime Minister Mudra Yojna, Stand-up India, Start-up India etc, established MSME focused Business Banking Branches/ Central Processing Centers and introduced MSME specific Loan Products/ Cluster Schemes for ensuring higher lending to MSME segment.

Challenges are always before MSME sector and there is a need to take these challenges head-on so that MSMEs can take active part in Nation Building process.


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