Commercial banks should lend liberally to the micro, small and medium enterprises (MSMEs), as underfinancing is one of the key reasons for the rising sickness of these units, according to B.V Rama Rao, president of the Federation of Andhra Pradesh Industries (FAPI).
He said there were 1,86,000 micro and small units in Andhra Pradesh with an estimated investment of Rs 27,000 crores, providing employment to 60,000.
“These units are facing great difficulties in obtaining finance, marketing support and raw materials. Banks should give advances to these units up to Rs 1 crore under the credit trust guarantee for micro small enterprises scheme without seeking any collateral security. But many banks are not willing to do so. We are educating the entrepreneurs by conducting programmes all over the State and exerting pressure on banks to follow the guideline,” he said.
A programme will be held here on Friday for the purpose, he added.
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