'Proposed base rate likely to benefit MSME exporters'

The Federation of Indian Export Organisations (FIEO) said the proposal would immensely benefit micro, small and medium enterprises sectors which normally get credit at a much above rate compared to big corporates.

The MSME sector contributes about 40 per cent to the country’s exports. India’s exports are on the negative zone since last October . “There is a need to incentivise export credit for exporters to be globally competitive. If this happens , it will impart 3 per cent to 4 per cent competitiveness to Indian exports,” FIEO President A Sakthivel said. Under the proposed mechanism, all banks will be required to declare a base rate and charge interest rates over that depending upon the credit profile of the borrower and repayment period.