J&K’s industry leaders discuss alternative MSME finance at SIDCO-PHDCCI meet

1 June 2021

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Srinagar: J&K’s industry leaders today discussed alternative finance for MSMEs at virtual workshop organized by the SIDCO and PHDCCI jointly.

Ziraat Times here produces the full text of the statement issued by the PHDCCI, J&K, detailing the key deliberations of the program:

PHDCCI J&K in association with J&K SIDCO organized a Virtual Interactive Awareness Session on Schemes of SIDBI, Credit Rating and Alternative Source of Raising Finance for MSMEs of J&K on 31^st May 2021, 12 Noon to 1:30 PM.

Chief Guest: Shri Ranjan Prakash Thakur IRTS, Principal Secretary Industries and Commerce J&K in his illustrious address mentioned that the industries department has made structures ready for all the policy matters for Central Incentive Scheme, Land Allotment policy, industrial development scheme of the UT, rules and guidelines, Single Window clearances, all these things have been positioned and essentially the framework for moving ahead is ready and available but the Covid Situation has slowed down the whole process but it will not hold us back. Mr Thakur further said that SIDBI has an important role to play in the entire system as most of the MSME`s in Kashmir and part of them in Jammu need substantial support. Sharing his experience Mr Thakur said that the private banks and government banks do not lend freely to the entrepreneurs of Kashmir because of various issues which were prevalent earlier that is why SIDBI has a very critical role to play out given the fact for limited institutional financing except JK bank.

Mr Thakur added that we are in the dawn of a new era and everything is being changed rapidly now as we are having one of the most lucrative industrial schemes ever in the history of our country for any state, the scheme is devised as such that MSME will earn four times for his investment.

Earlier the Sr Vice President PHDCCI Mr Pradeep Multani gave the presidential address and stated that J&K have proven capacity in overcoming many business challenges and winning the market if they are properly supported by the government and a conducive atmosphere required for it. He said that today’s entrepreneurs are highly capable and have good exposure to the world. What they cannot do is solve problems that are beyond their capacity. The problem of arranging adequate finance and making it easily available to the entrepreneurs. The Government should come forward to solve these problems with the highest priority. And, if the government can do so, the entrepreneurs will surely give their highest return for the nation. He further said that this webinar is just one step that we are taking to honour the New Industrial Development Scheme of J&K. We will try to “make every effort to explore the scope for increasing financing from alternative sources and to submit any resulting proposals to the Department of Industries and Commerce of J&K.

Mr Mohammad Haroon (KAS) Managing Director J&K SIDCO extend special thanks to PHDCCI-J&K for organizing this awareness webinar for the entrepreneurs of J&K and he further added that It is my sincere hope that we shall be seeing more of these kinds of awareness workshops in the future. He mentioned that SIDCO would be happy to be associated with PHDCCI – J&K and organising more of such interactive and informative webinars. Mr Haroon while elaborating the role of JKSIDCO said the purpose of SIDCO was to initiate, promote and develop industrial enterprises. He also emphasized for opening a dedicated MSME Branch in all districts. Further he added that the significant reasons behind financial challenges are the lack of financial literacy. The majority of MSME owners are from education-deprived and poverty-hit regions. Thus, they are unaware of the special financial privileges given to them by the government. This carelessness causes them to make some impractical financial decisions, leading to financial crises. Mr Haroon highlighted the credit rating problems being faced by MSME`s of J&K and for that problem we need to form a new base and substantial credit could be made available for these entrepreneurs. Further the MD SIDCO put forth that the availability of Fintech, SIDBI and other alternate Source of finances for MSME is essential and we will build capacity of MSME`s of J&K by organizing more of such programmes.

Mr. Anil Khaitan Former President & Mentor of MSME Mentoring & Guidance Centre, PHDCCI mentioned about the alternate source of funding like Fintechs – digital lending Fintechs platforms have the potential to significantly bridge the funding gap and are able to change the way the MSME sector accesses credit. He also mentioned that in Current financial year there is a probability of NPA`s Crossing 30% mark that is forcing banks to be conscious of lending. He further said that finance is the basic need of every company but due to lack of awareness, MSMEs are not able to avail the benefit of funding schemes of Government and Banks. PHD Chamber has created a MSME Mentoring and Guidance Centre to enlighten MSMEs about various Government and Bank Schemes and extends help to them to avail benefit of such schemes.

Mr. Khaitan added that banks prefer to play safe while extending loans. Therefore, the Bank credit growth rate is low in India In fact the credit growth rate of banks has decelerated over the past few months to 6.3% which is lowest in the last 60 years leading to slowing down of economic growth in the country.

Mr Baldev Singh Raina Chairman PHDCCI in his welcome Address formally welcomed all the Speakers and delegates and he elaborated the key objective of the Session and stated that this would serve a platform for devising ways to foster the growth of Start-ups and Entrepreneurship in the UT. The webinar also aimed to disseminate and discuss the various Schemes and facilities introduced by the Government as well as by SIDBI and NBFC`s. He told the audience that there is a lack of awareness among youth about government or even bank schemes. He further mentioned that even before the pandemic hit, the J&K businesses were already in a precarious position from last so many years and are working in very tough conditions and now the fact of the matter is that these businesses are now in extreme distress highlights the urgent need to boost the resilience and capacity of these existing enterprises, so that they can ultimately preserve jobs and be on the road to recovery. In order to recover from this crisis, the businesses in J&K need awareness and handholding to avail the benefits from various financial institutions of country and also we require the relaxations and alternatives for dependency on credit ratings, CIBIL Score and other financial norms which are really in bad shape in this part of country.

Mr Rahul Sahai, Chairman PHDCCI Jammu moderated the entire session excellently and also took questionnaires from the audiences to the elite panel of experts of the session and while highlighting the role of SIDBI he mentioned that SIDBI – Refinance and supports small scale industries, Funds support to MSME sector, discounts bills of these industries, offers financial services of hire and purchase, factoring and leasing services, promotes employment, assists exports and provides loan to women and underprivileged people. He further added that all MSME`s should avail loans from SIDBI as it’s a very start up/ MSME friendly Bank aiding the small trader. Its usefulness should be propagated so that maximum traders and industrialists can avail of the financial and professional expertise of the bank.

Mr Rahul Priyadarshi, General Manager (SIDBI) Chandigarh, presented an overview of SIDBI and he explained in detailed the key products of SIDBI like AROG/ SHWAS/ SPEED/PRATHAM/DC`s / Working Capital. He further told the audience that SIDBI has entered into an MoU with PHD Chamber of Commerce & Industries to provide financial assistance to its members through which the Chamber would recommend its MSMEs seeking financial assistance to SIDBI with a pre-designed Recommendation Sheet for Term Loans upto Rs. 5 crore can be covered under the arrangement at a nominal Upfront fee of 0.25% and assistance for both Term loans and Working Capital facility.

Mr Nazim Khan (KAS) Director Industries Kashmir, gave a detailed presentation on role and function of Industries department in Kashmir and he highlighted the role of industries and commerce department as enablers for various government schemes and he mentioned the various components of New Industrial Development Scheme and PMEGP and he told that the decision has been taken to shift Soft Loan component shifting to bank. Mr Nazim vouched for alternate source of financing and he also stated that the difficulties faced by entrepreneurs usually start with excessive documentation, under financing of projects, lack of provision for sufficient working capital thereby causing strain business activity that results in delayed repayments and drop in credit ratings, and mostly the lack of awareness among entrepreneurs was pointed out by Director Industries Kashmir.

Ms Anoo Malhotra (KAS) Director Industries Jammu gave a detailed presentation on role and function of Industries department in Jammu and she thanked PHDCCI J&K for organizing the webinar in association with JKSIDCO. She stated that the SIDBI is an important nerve modern organized society and will definitely play an important role in the transformation of MSME`s with customized schemes for the enterprises. She also pointed out that we need to organize more awareness programmes to sensitize the entrepreneurs regarding all these available financial institutions of the country. She further added that rate of Interest of SIDBI and other NBFC`s has always been a matter of concern for MSME`s

Dr. H P Kumar, Former Chairman-Cum-Managing Director NSIC Ltd in his speech strongly recommend that the MSME`s who are not being provide credit facility or Loans by the financial institutions should be reported to Ministry of MSME and UT government needs to open a grievance online portal for that so that these entrepreneurs get themselves registered and heard through ministry of MSME and in this way they will not be deprived from the finances and he also advises the entrepreneurs that upto 2-Cr there is collateral free loan for MSME by SIDBI and if Banks will ask for any collateral then same thing need to be brought in notice of PHDCCI or Ministry of MSME through CHAMPION Portal of MSME. Dr Kumar also told the entrepreneurs to avail the benefit of MUDRA loan upto 10 Lakh which is sanctioned with less paperwork, further an important point was raised by Dr Kumar about Stand-up India Scheme under which each bank branch has to give one Loan to Women Entrepreneurs and one Loan ST/SC in which Banks are lagging behind their Targets.

Mr Mohit Jain Chairman MSME Committee PHDCCI highlighted the active role PHDCCI MSME Committee is playing for the benefit of MSME sector and would like to be associated with such informative webinars on Pan India basis.

Mr. Neermoy Shah, , India Ratings and Research gave a detailed presentation on importance of ECR for MSME`s and the various nomenclature methods for rating of MSME by Fintechs like BBB- , AAA, BB+ and he explained Credit Circle LGD and PD.

Mr Akshay Babbar, Regional Head Sales, from M1xchange gave his presentation on how M1 exchange works as amazon of vendor bill discounting wherein we have very conveniently combined three main players i.e Buyers, MSMEs, Financial Institutions, so it is a post shipment financing tool where completely digitally MSME benefit they can finance there trade receivables

Mr Muhammad Shafi Tramboo, PHDCCI Expert chair Industries and Commerce Kashmir while delivering the vote of thanks On behalf of PHD Chamber of Commerce & Industry, thanks to those who have directly and indirectly contributed to this Webinar. He also extended thanks to Managing Director J&K SIDCO Mr Haroon Sahab for his support for organizing this webinar and a special thanks to the organizing committee, Director Industries Jammu and Director Industries Kashmir for their constant support and coordination. Mr Tramboo concluded the webinar by saying that presently we are in a temporary phase and it’s going to subside as soon as industries recover and we are hopeful that grass will become greener. He further added that we still believe that the situation is going to get better for all of us and we will see economic prosperity in Jammu & Kashmir.

Other eminent speakers present during the webinar and Interacted in the Question Answer Session

· Mr. Kuldeep Gupta, Co-Chairman, PHDCCI-Jammu

· Mr Showket Choudhary, PHDCCI-Kashmir

· Mr Prem Diwan, Executive Member PHDCCI Jammu

· Mr Himayu Wani, Executive Member PHDCCI Kashmir

· Mr Lalit Mahajan, President BBIA Jammu

· Dr Ankur Gupta, Director MIET Jammu

The Sessions went for almost 3 hours and was attended by more than 75 industry members from J & K.

Mr Naveen Seth, Assistant Secretary General PHDCCI besides his introductory remarks also mention while concluding the session that PHDCCI would like to work very closely with SIDCO and Industries & Commerce Department of J & K for organising such interactive and informative sessions for the benefit of the industry member in J & K so that their pain points are addressed and members area aware about the schemes and could avail them well within the stipulated time.