New Delhi: Around Rs 8 trillion in credit has been disbursed to India’s micro, small and medium enterprises (MSMEs) over the past three years, backed by the RBI and government policies, helping them access finance, expand business, and participate more effectively in public procurement,  Girish Luthra, President, FICCI-CMSME.

 

“RBI, together with the Government of India, has been working very closely to make finance easier for MSMEs. One of the major challenges was related to guarantees or collateral requirements. The government addressed this by creating a threshold, initially one crore, and now up to ten crores, where MSMEs can access funds without collateral,” Luthra told ANI exclusively on the sidelines of 11th FICCI-CMSME Summit in New Delhi.

 

He said that this initiative, combined with digital tools like the Government e-Marketplace (GeM), has already created a substantial impact.

 

“GeM and its focus on sustainability are making a real difference for MSMEs. With six million plus enterprises forming the backbone of this sector, FICCI-CMSME is the only large confederation focusing exclusively on their growth, and government support is helping us do a great job,” he said.

 

Highlighting participation in public procurement, Luthra added, “Today, almost 45 percent of public procurement is done through MSMEs, and we truly appreciate the government’s efforts in this regard.”

 

Addressing concerns about NPAs, he clarified, “It’s a common misunderstanding that MSMEs contribute heavily to NPAs. In reality, NPAs in the MSME sector are only 3.9 percent, which is far lower than that of large organisations. This low risk is why the RBI has supported collateral-free funding for MSMEs.”

 

On ease of doing business, he said, “Interstate competition is improving outcomes because each state wants to perform better than the other. Implementation happens at the state level, and this competition is proving very effective.”

 

Discussing domestic challenges, he added, “Labour reforms over the past two years have reduced production losses due to workforce issues significantly. Similarly, state governments are relaxing land laws, and cluster-based industrial approaches now allow MSMEs to set up plug-and-play operations with all titles cleared — this is the most effective model.”

 

Stressing the importance of outreach he said “The government has excellent MSME policies, but many enterprises are unaware of them.”

 

FICCI-CMSME is working with the Ministry of MSME and NSIC to organise 100-200 outreach programs across the country.