‘Free small firms from money-lenders’

They create jobs that sustain semi-rural India

MUMBAI: Making a strong case for freeing micro and small enterprises from the clutches of private money lenders, finance minister P Chidambaram on Saturday reminded the banks that they are duty-bound to lend to the sector.

“Banks must help and nurse these micro and small enterprises...MSEs are entirely dependent on unscrupulous money lenders who charge huge interest rates,” he said releasing the Code of Banks’ Committment to MSEs on Saturday.

“We have made significant progress as far as agriculture sector is concerned, in education, loans to industry and in the last few years to SMEs through SHGs (self-help groups). But I do not feel that we have yet been able to reach credit to micro and small enterprises,” he said.

He also said MSEs were more vulnerable than low paid employees who hold regular jobs. “In business you can’t be certain that every day will be the same as previous or every day will bring the same rewards or returns,” Chidambaram said. 

Chidambaram said that MSEs, just like SMEs, are among the biggest employers. “The kind of jobs they offer may not be good, regular and “decent” jobs but still they offer many jobs to people with little education, training and skills,” he said, adding that rural and semi-rural India are sustained by MSEs.

When industry like steel goes through a period of crisis as it did five to six years ago, all agreed that industry should be bailed out. But when MSE fails because of no access to credit, hardly anyone expresses concern, he said.