KOCHI: The micro, small and medium enterprises (MSME) sector in the state is under crisis due to severe disruption in cash flow, inadequate working capital for wages, bill payments and inventory management, said Thomas John Muthoot, state chairman of the Confederation of Indian Industry (CII). Speaking at the CII-MSME Finance Conference on Monday, he said the pandemic has grievously dented the sector.“Nearly 50 per cent of MSMEs have witnessed a 20-50 per cent impact on their earnings.
The prime objective of the conference was to provide a platform where key stakeholders of the financial ecosystem could share their views on the current crisis and offer solutions to overcome the crisis,” he said.
Financial institutions should create products and services suitable for MSMEs, which is our economy’s engine of growth, said SBI managing director C S Setty.
“Only three to four per cent of MSMEs avail services from the banking system. Others depend on private lenders. Restarting business is the biggest challenge faced by MSMEs now. SBI has distributed around `1,100 crore as loan to 24,000 MSMEs. Banks should develop a good relationship with non-banking financial companies and a co-lending model should be developed,” he said.
A majority of MSMEs have a history of unpaid loans and there is a need to promote financial literacy in this sector, said K Elangovan, principal secretary, Kerala Industries. He also urged capital portfolio managers to go beyond traditional markets.