AP Govt agrees to allot land to MSMEs

Micro, small and medium enterprises have to approach in groups Hyderabad: In an encouraging gesture, Andhra Pradesh Industry Minister J Geeta Reddy has agreed to allot land to MSME sector for setting up 'single product' clusters in the State. Responding to the request of Fapcci's Banking Committee Chairman Hari Govind Prasad, the Minister said that the industry body may have to organise small entrepreneurs in groups and approach the government for establishment of clusters. "If the prospective entrepreneurs form groups and approach us, we will extend full support to them. Even the government is willing to allot land for the purpose of setting up of single product clusters," Geeta Reddy said. Delivering the inaugural address at FAPCCI and HMTV-organised Bankers Conclave on "Energizing the MSME Sector � The Growth Engine of the Economy" here, Geeta Reddy told the bankers to act as the partners in each of the small enterprise they financed and show their personal commitment to the project. "They should to slow down on NPAs, especially in MSME sector, and try to help the budding entrepreneur to perform better and if required they should also participate in the marketing of the products," she pointed out. Revealing that the government is seriously working towards attracting global auto majors into the state, the minister said the recent launch of Mahindra Tractor project at Zaheerabad is the testimony for its efforts. "We hope very shortly a major automotive project will be set up in the state," she said however refused to elaborate further on it. State require more automobile spare-parts clusters to attract automobile majors and the first is being set up at Zaheerabad, she added. Delivering key-note address, Economist and Director of IISS, Sanjaya Baru, revealed his research findings in 70s that SME sector had about 70 per cent mortality rate. It is possible as the sector is expected to attract first generation entrepreneurs who tend to make financial mistakes. He felt that the bankers must act as partners in the enterprise, but it is not the case in the country, which is reason for high incidence of mortality in the MSME sector. As part of its effort to create awareness among the MSMEs who are suffering due to lack of financial support and NPAs, Fapcci has approached bankers to organise a two-day Mega Loan Mela apart from the seminar. Most of the banks led by SBH and Andhra Bank are participating in the loan mela. SBH Managing Director M Bhagavantha Rao said that his bank had announced 2013-14 as the MSME Year and it targeted to achieve a 60 per cent in the loan disbursements for MSMEs. And even the bank was offering loans with the lowest interest at 11.75 per cent to MSMEs, he pointed out. SBH also issued allotment letters to some small entrepreneurs seeking less than a crore of rupees at the inaugural function. Andhra Bank CMD B A Prabhakar said that the bank was focusing on the MSME sector in the current year and it had established 18 specialised branches besides 213 special counters at the existing branches for the benefit of MSMEs. "We are implementing an online application system for MSME loans, which will be attended to in time-bound way," he said. Earlier, welcoming the gathering, Fapcci President Devendra Surana said that the MSMEs were suffering from various bottlenecks such as poor credit, high cost of credit, delay in debt restructuring etc. He wanted the bankers to act promptly in order to improve the financial conditions in the sector.