Small scale industries' body seeks cheaper loans

Small scale industries' body seeks cheaper loans

 Representative image. (Credit: iStock Photo)

 The MSMEs that are struggling amid the Covid-19 pandemic need cheaper loans in order to survive, the Karnataka Small Scale Industries Association (KASSIA) has sought. 

On Monday, KASSIA President R Raju sent a letter to Chief Minister B S Yediyurappa, seeking lower interest rates on loans. 

The letter pointed out that about 25-30% of the small and medium sector enterprises risked shutting shop permanently in spite of the state government relaxing labour laws and giving a waiver on fixed electricity charges.

“They are badly in need of cheaper loans from financial institutions. The 4% loan facility offered by the Karnataka State Financial Corporation (KSFC), which is now inaccessible for want of funds, needs immediate revival,” the association stated.

The association has also urged the CM to make government tender process friendly to MSMEs by holding departments accountable for reservations to MSMEs. In its present form, the MSMEs are left out of large tenders as they cannot afford the prerequisite Earnest Money Deposit (EMD), the association has said.

Withdrawal of the ‘Karasamadhana Scheme’, which was meant for aiding MSMEs with a one-time settlement of outstanding taxes, without interest of penalty, had also come as a huge blow. This needs to be revived, the association president added. 

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