FDI in non-bank lenders needs to be explored for greater support to MSMEs: Nitin Gadkari

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Union minister Nitin Gadkari said foreign direct investment can be explored in the NBFC sector, which in return will prove to be a huge support to micro, small and medium enterprises (MSMEs).

The minister opined that strengthening of non-banking lenders or NBFCs, state cooperative banks, district cooperative banks, credit societies, etc is required to extend support to MSMEs during this challenging time.

Further, foreign direct investment (FDI) can be explored in non-banking financial companies (NBFCs) to strengthen them, which will lead towards greater support to MSMEs, an official statement said quoting the minister.

He said a credit rating mechanism can be devised for NBFCs also to support them adding that a possibility needs to be explored to get some foreign investment in the NBFC space.

He said in a situation where an NBFC has a good credit rating, it can be a good thing if such a company can also attract foreign investment but a criteria needs to be fixed for this purpose.

Regarding request for extension of interest subvention scheme for MSMEs, which was in place until March 31, 2020, Gadkari said: "We have already recommended to the Finance Ministry for giving extension to this scheme. I am trying my level best to get it approved... If I get it, definitely we will continue this scheme".

The minister, who also holds road transport portfolio, held meetings via video conferencing with the representatives of Council of Leather Export, FICCI-'NBFC Program' and IMC Chamber of Commerce and Industry on impact of COVID-19 on MSMEs.

Addressing the representatives of Council of Leather Export, the minister mentioned that the proposal for establishing leather cluster nearby to Agra Ring Road may be submitted.

These industrial clusters may develop smart cities, smart villages and other infrastructure to help the people working in leather sector of Agra. He added that the permission from Ministry of Aviation may be explored for using private airline for the purpose of sending export products.

Gadkari said that the need of the hour is to fight the war against COVID-19 pandemic while continuing the economic activity.

The minister further mentioned that the pandemic can be a blessing in disguise, and we need to utilise this opportunity. He emphasised on usage of PPE (masks, sanitiser etc) and advised to maintain social distancing norms.

He mentioned that special focus is required to reduce imports from other countries. He added that the Ministry of MSME is working on two booklets to cover details about last three year's export and import.