The government and the industry on Wednesday agreed on the need to provide more and more credit to 2.6 crore small and medium enterprises (SMEs) in the country. The participants at FE’s Round Table Conference on The Indian Growth Story and the SMEs on Wednesday reached a consensus on critical issues such as skill development, technology upgrade, market access and environmental awareness.

Industry representatives said in the absence of bank credit, SMEs should be given options to raise funds through other sources like stock exchanges and private equity. They also asked the Centre and state governments to realign taxation norms and expedite the process of duties refund.

“We have realised that banks are reluctant to give loans to SMEs as showed by the recent statement of RBI deputy governor (KC Chakrabarty) that banks would not say no to viable projects. A lot is still required to be done to increase the flow of credit to the sector,” micro, small and medium enterprises ministry secretary Dinesh Rai said at the conference.

However, bankers said the gap in funding was largely because the borrowers are too small and are in the unorganised sector. “As they are in the unregistered sector, the units don’t have proper books and nobody has a clear idea about their projects,” State Bank of India’s general manager (SME-trade and services) TS Krishnaswamy said.

Milagrow CEO and founder director Rajeev Karwal said the industry was lacking in marketing activities and upgrading technological capabilities. “Around 80-85% of them are not aware of the various schemes run by the government,” he added.