UP government to organise ‘loan melas’ to push credit growth

Virendra Singh Rawat

Lucknow / Nov 18, 2020

To support the micro, small and medium enterprises (MSME) facing the working capital squeeze amid the pandemic, the Uttar Pradesh government will organise ‘loan melas’ in all the 75 districts to boost the credit offtake.

UP is looking to augment MSME exports in the next three years to hit the Rs 3 trillion mark. During 2018-19 and 2019-20 fiscal years, the  state MSME exports stood at Rs 1.14 trillion and Rs 1.20 trillion respectively.

The government aims at providing easy and spot loans to the beneficiaries under various state and central schemes. The ‘loan melas’ will be organised at all the branches of the different commercial banks operating in the state.

UP chief minister Yogi Adityanath recently instructed officials to coordinate with the commercial banks, so that all the branches could be covered under the ambitious plan. Besides, he has stressed providing business loans to a women entrepreneur and an SC/ST entrepreneur at each of the 18,000 bank branches in the state. This way, the state is targetting to benefit about 36,000 women and SC/ST entrepreneurs with the proposed ‘loan mela’ events.

Following the covid-19 lockdown, the Yogi government has been taking a series of measures to provide succour to the state business entities facing the pandemic headwinds in the form of credit squeeze, loss of market, closure, flight of labour etc.

During lockdown period, the state claimed to have facilitated working capital loans to the tune of Rs 30,000 crore to a million MSMEs. The beneficiaries included nearly 437,000 existing and 624,000 new units across different industry segments, which were infused with bank loans of Rs 10,847 crore and Rs 18,330 crore respectively under different schemes.

Besides, the state has claimed that two million jobs were created by way of the fresh credit infusion of Rs 30,000 crore to the MSME sector. The government is aiming to provide institutional credit to two million MSME units in the current 2020-21 financial year and to generate 8 million employment opportunities by expanding the credit net to the sector.

Additionally, the government has facilitated loans totalling Rs 15,000 crore to the MSMEs under its one district, one product (ODOP) scheme over the past three years, benefitting over 3,000 enterprises/self help groups.