Kottayam: The credits offered by banks in Kerala witnessed a steep hike as the service and trade sectors were also included in the ambit of Micro, Small and Medium Enterprises (MSME).
The total amount of loans dispensed by banks in the MSME sector was Rs 62,141 crore till March 2021. This increased to Rs 69,612 crore in September 2022 and rose by Rs 7,471 crore in the next one-and-a-half years. The figures are expected to increase further in the current financial year, when the data of the last two quarters are also added.
The extension of the interest rebate schemes to the service and trade industries resulted in the increase in borrowing. A four per cent interest rate subsidy is offered to entrepreneurs who make payments on time.
There have also been apprehensions as to whether entrepreneurs will abandon the manufacturing sector if the benefits offered in all sectors are the same. The service and trade sectors require less labour than managing a manufacturing unit.
MSME's major attractions are comparatively low investments, and fewer employees. The benefits will help entrepreneurs to reduce the risk of loss along with easing procedures for arranging approvals.