CREDIT flow to micro, small and medium enterprises (MSMEs) has more than doubled in two years to Rs 2.57 lakh crore in the financial year ending March 2009, Reserve Bank of India deputy governor KC Chakrabarty said.
â€œSo, Rs 1.27 lakh crore to Rs 2.57 lakh crore in two year time as credit to MSME sector, still we are saying banks are not giving credit,â€ Chakrabarty said.
Asking entrepreneurs to come up with viable projects that can convince bank branch managers of repayment of the loan, he said there is no shortage of funds and industrialists must understand the difference between money and credit. â€œToday, there is no bank in this country who will refuse money. Every bank is sitting on tonnes of money ... As Reserve Bank, I can tell you there is no dearth of credit,â€ he said.
â€œYour problem is you donâ€™t require credit, you require money,â€ he said chidding those who fail to see â€˜credit has to be self-liquidating on a viable project and has a costâ€™. Banks should not be as aggressive as venture capitalists and must do their own assessment before advancing loans without depending on the credit rating agencies, he said.
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