The Reserve Bank of India has set a target of extending banking facilities to all villages in the country by 2015 as part of inclusive growth, the RBI Deputy Governor, Dr K.C. Chakrabarty, said.
As a first step, RBI has advised banks to extend banking services to every village having a population of over 2,000 by 2012. The extension of banking facilities has not taken place in the country in the last 50 years due to absence of technological advancement and other institutional constraints, he said while speaking at after the formal release of India Micro, Small and Medium Enterprise 2010 (MSMER 2010) brought out by Institute of Small Enterprises Development (ISED) here on Friday.
He said majority of the six lakh villages in the country do not have a proper banking system and lack access to credit.
He said the growth in the MSME sector in the country has doubled in the last four years despite the global meltdown.
The total credit extended to the sector by the banks is more than 25 per cent and the contribution of the sector to the GDP is 11 per cent.
RBI, he said, has instructed all banks to extend all help to MSMEs and urged the enterprises not to seek concessional credit. There have been complaints of entrepreneurs are not getting help from banks. He said that all deserving entrepreneurs should get credit.
The many shortcomings in extending support to MSME sector can be rectified collectively. There is no need for giving concessional credit to unviable units, he said adding, that the MSME sector plays a prominent role in keeping up the spirit of entrepreneurship.
The MSMER 2010 report highlights India's unutilised potential relating to MSME, as the sector has substantial potential of capitalising on the global warming agenda.
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