Patna,(BiharTimes): The Micro, Small and Medium Enterprises (MSMEs), which, in spite of being universally regarded as the engine of economic growth, and key instruments for promoting equitable development and employment generation, are facing the problem of proper funding from banks.

This was stated by development commissioner Alok Kumar Sinha at a conference on MSME financing, organised by Confederation of Indian Industries (CII) in Patna on Monday. He said it is a fact that these enterprises would never be able to attain their full potential till ‘surgical moves’ are made by the government.

Highlighting the significance of the MSMEs for the development of the state he said their vast network would attract big investors and at the same time would be a huge source of employment in densely populated states like Bihar.

The development commissioner said at present Bihar has about 1.92 lakh registered units with a total investment of around Rs 1,941 crore,creating employment for more than six lakh skilled and unskilled workers.

Speaking on the occasion Chairman, Bihar State Council, Confederation of Indian Industries, S P Sinha, said that the Council was very concerned about the challenges MSMEs is facing in the state.

Later talking to the media Regional Director (Bihar and Jharkhand), Reserve Bank of India, Manoj Kumar Verma, said the MSMEs are on the priority list of the Union government, which is striving to achieve universal finance access for the sector. MSMEs account for around 40 per cent of the total exports and they are the nursery for corporate houses.

He said high cost of acquiring and maintaining state-of-the-art technology is a major challenge for the sector.

However, he added the MSMEs cannot afford to neglect the importance of proper planning.

Chief General Manager, Local Head Office, State Bank of India, Rakesh Sharma, regretted that the credit situation in Bihar is just 43%, which is very poor when compare to the  national figure of 79%. The prevailing scenario of MSME sector in Bihar needs to be changed, he said adding the banks should adhere to the policy of ‘rejection by approval’. The loan applications should not be rejected by the bankers at the branch level, unless the rejection is sanctioned by higher authorities.


Director, MSME Development Institute, Patna, Pradeep Kumar said the Bihar Industries Association (BIA) should help the banks by joining the 'loan committees'. This would certainly decrease the number of ‘bad loans’ or non-performing assets.