Oriental Bank to increase lending to SMEsApril 20th, 2011 - 4:50 pm ICT by IANS
New Delhi, April 20 (IANS) The Oriental Bank of Commerce will increase lending to small and medium enterprises (SMEs) with a view to boosting manufacturing growth in the country, the bank’s chairman and managing director Nagesh Pydah said.
“SMEs need special encouragement in view of their significant contributions to the economic growth, exports and job creation,” Pydah said at an event organised here by the Council of Small and Medium Enterprises.
Access to funds is one of the biggest challenges facing SMEs in India.
SMEs, which account for almost 90 percent of employment in organised sector, have access to only 10 percent of bank funds, according to a study by the Credit Rating and Information Services of India Ltd (Crisil).
Pydah said the Oriental Bank of Commerce and other public sector lenders would ensure greater flow of credit to SMEs to meet their working capital requirements.
He advised SMEs to get credit rating done by external agencies for speedy processing of credit applications.
“SMEs have to gear up their operations to become more professional, transparent, compliable to rules and norms, and should part with authentic information to facilitate timely and adequate sanctioning and disbursal of credit,” Pydah added.
According to a Crisil study, bank lending to SMEs increased 40.56 percent in 2010-11. However, SMEs sector still require over Rs.15,000 crore fund to meet their capital requirements.
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Tags: bank of commerce, challenges, credit applications, credit rating, crisil, economic growth, encouragement, india ltd, information services, job creation, lenders, managing director, New Delhi, norms, oriental bank of commerce, public sector, small and medium enterprises, smes, working capital