In a forum to review the credits of select start-ups, Reserve Bank of India (RBI) at its Empowered Committee meet on Medium Small and Micro Enterprises (MSME) here on Wednesday had invited a clean energy start-up Avant Garde Innovations being the first in the UN campaign for environmental sustainability and climate stewardship, among industry officials and stakeholders. The stakeholders brought to light the crisis in the industrial sectors including cashew, rubber, Khadi and village industries at the platform.
“Though there are financial agencies and banks assuring to provide loans, in reality many start-ups with their innovations struggle hard to stay afloat. Very often the procedures quoted by the banks and industries centres are not in sync with the reality, how can a start-up in its first year offer financial statement for three years,” questions Avant Garde CEO Arun George, while seeking for a change in the financial policies.
While, officials of the cash-strapped Kerala State Cashew Development Corporation (KSCDC) which had incurred a loss of Rs 127.95 crore indicate that it lacks the working capital and most of its factories are under threat of closure due to faulty industrial policies. Of the over 600 cashew factories with about 3.5 lakh employees operating under various organizations in Kerala, many are crisis-ridden.
Officials from District Industries Centre, Kerala Bureau of Industrial Promotion, Khadi Village Industries Board and representatives of industrial associations also gave their feedback on the industrial sector in the state and called for measures to revive crisis-ridden industrial units.
Official sources in the RBI told that it was a quarterly meet of the RBI empowered committee led by its regional chief with bankers and industrial representatives to review the credits of MSMEs including start-ups. RBI officials said they are also exploring the possibilities to offer solutions through banks to address the start-up woes.
“Though there are three centrally supported schemes including Mudra, Start-up India and Stand-up India to support MSMEs, it has to reach the deserving.” an official at RBI told.
Under Mudra (Micro units development and refinance agency) of the central government, Rs 10 lakh is offered as loan to the feasible proposal for new ventures, while Stand-up scheme offers loan of Rs 10 lakh to Rs 1 crore for weaker sections and women. Whereas, Start-up India scheme provides only equity funding and loan under credit guarantee scheme.
Yet, the project proposal needs to be supported by feasibility studies. RBI aims to ensure that banks do not compromise on their diligence and credit guarantee schemes, the official said.
Source: The Economic Times
