Ministry of Finance on foreign currency loans for MSMEs

BANGALORE, INDIA: The Ministry of Finance should consider putting a monitoring committee to ensure that its recent directives for funding foreign currency loans to micro, small and medium enterprise (MSME) export sector brings desired results, said exporters' body Federation of Indian Export Organisations (FIEO) on Wednesday.

While thanking the Ministry of Finance for issuing the directives, FIEO president M Rafeeque Ahmed said that a monitoring committee should be put in place by the ministry so that MSME export units can avail optimal benefit of directive

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"There is a  apprehension that since banks now operate  in an environment of de-regulation and laissez faire  advisories such as these often succumb to pressures of profit bottom lines. Hence in order to obviate such a situation  a monitoring committee must be put in place by the Ministry of Finance enabling all MSMEs to benefit from the directive of RBI," he said.  

Ahmed added that cost of credit becomes a sensitive  factor in the current scenario of global slowdown, given the fact that the differential between Indian exporters and their global peers is in the range of 5-6%.

"The rupee credit has gone up substantially since March 2010 and 13 policy hikes could have only rendered exports uncompetitive.  As a result, many exporters were availing the foreign currency loan window which was steadily drying up," said the FIEO chief.

Source: www.smetimes.in