Saturday, May 31, 2003
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Kerala
By Our Special Correspondent
He was inaugurating a technical seminar on `Small and medium enterprises financing' organised by the State Industries Department in cooperation with the Kerala Bureau of Industrial Promotion here today. The Minister said that though rapid strides had been made in the social sector, the State lagged behind in industrialisation and was not at all known for entrepreneurship. He was of the opinion that time has come to stop shifting the blame. While entrepreneurs complained of lack of support from financial institutions, the latter had a genuine grouse that most of the projects were -not creditworthy'. The small and medium enterprises (SME) sector was under pressure in the post-liberalisation era and there was an ironic situation in the financial sector where the institutions were flush with money but there were no takers. Now the task before the Government was to change the mindset of the people and to bring industrialisation and exploit the human potential which had proved that Kerala could be a match to any developed State in the country. R.V. Shastri, Chairman, Canara Bank, in his address, said that time had come for SME's to concentrate on quality, which could be attained only through technology upgradation. With globalisation and opening up of economy, there was increasing pressure to improve quality on each and every product. This is why banks had started extending financial support to enterprises as they were having schemes for financing industrial, business and service enterprises of SME sector. He, however, reminded that the mindset of entrepreneurs should also change while interacting with financial institutions. Referring to rising level of non performing assets (NPA), he said some of the problems faced by bankers in financing small scale industrial (SSI) units included high rate of sickness, lack of credit inputs like credit rating, high administrative costs for lending, lack of proper financial management by the units, etc. Despite all these problems, he said banks had taken pro-active steps including displaying the facilities available to SSI entrepreneurs in all branches, disposal of applications as per the time frame stipulated by the Reserve Bank of India (RBI). The communication between the borrower and the banker should improve while dealing with financial matters. He also called for evolving a system for financing so as to get the benefit of banking by entrepreneurs. Mr. Xavier Thomas Kondody, State president, Kerala State Small Industries Association, said the SSI sector in the State remained fragmented and characterised by lack of product differentiation, low scale of production and inappropriate technology.
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