Activities Round Up

Date : 05 Jan to 05 Jan 2016
Place : New Delhi
Organised by : FISME

FISME attends consultation at DFS, Ministry of Finance

In a meeting convened on 5th Jan 2016  by Department of Financial Services, Ministry of Finance on non-tax matters focusing finance related issues in context of Budget 2016-17,  FISME stressed the need to revive/ recreate State Financial Corporation to fill the crying need of project finance.  FISME proposed several interventions for consideration for Budget 2016. Elaborating on the SFC the issue, it was mentioned that the SFCs played  yeoman’s role in financing MSME ventures. Being arms of the State Government, they  could also coordinate support from other state agencies to facilitate early grounding of the projects.

FISME stressed that the Banks lack commercio-technical knowledge at branch level necessary to appraise and fund new projects. FISME also suggested opening up financing of Non–fund limits to the insurance sector. Currently banks assign the same risk weightage to fund as well as non-fund based limits and seek asset based collateral securities. In MSMEs that supply through tenders working capital is blocked because of non-fund based limits for bid bonds/ guarantees and performance guarantees  in multiple tenders.  As the guarantees are basically risk instruments, they should be delinked from   working capital and provided by the  insurance companies who are better equipped to assess such  risks   and may offer at lower costs. The meeting was attended by senior officers from SIDBI and members of other MSME  Associations. On behalf of FISME Secretary General FISME and Director (Policy) made presentations.