Rs 1,000 crore for TIIC to boost MSMEs

CHENNAI: Governor Banwarilal Purohit in his address to the Assembly said the State government will infuse an additional Rs 1,000 crore over the next three years into the Tamil Nadu Industrial Investment Corporation (TIIC) to expand its lending operations to cover MSME units that still do not have access to institutional credit.

Welcoming the move, Chennai District Small Scale Industries Association president, TV Hariharan, said, “It is a good move for the MSME sector. TIIC’s interest rate is low compared to banks, which charge 12-13 per cent; TIIC charges only six per cent subvention interest. The only issue is that the entrepreneur has to provide collateral and pay on time or he would be penalised.”

Echoing the sentiment, S Anburajan, president of the Tamil Nadu Small and Tiny Industries Association (TANSTIA), said, “Under the Centre’s Emergency Credit Line Guarantee Scheme (ECLGS), banks lend at two per cent higher rate compared to TIIC but they don’t demand collateral. TIIC also must not demand collateral.” He added that the State should come out with a mechanism where micro-institutions could also avail funds. The micro-industries are dependent on private lenders who charge higher interest rates.

Earlier, the Governor said that the State has a total of 23.6 lakh registered MSME units, with a total investment of Rs 2,73,241 crore, providing employment to almost 1.52 crore people. He said that the new MSME policy was finalised after consultation with multiple stakeholders, and will be released by Chief Minister Edappadi K Palaniswami, shortly.

“In order to help MSMEs tide over the pandemic, the government front-loaded release of different kinds of subsidies and coordinated with banks and financial institutions to ensure that MSME units in TN benefit through ECLGS. To facilitate quicker access to loans under ECLGS and to provide relief to MSMEs, the State also exempted payment of Stamp Duty for registration of Agreements relating to the Memorandum of Deposit of Title Deeds (equitable mortgages) until March, 31, 2021,” the Governor said.

He added that the Registration Fee was reduced to 0.1 per cent from 1 per cent for Micro and Small Enterprises. The government will also amend the Registration Act, 1908, to permit online registration of agreements relating to Memorandum of Deposit of Title Deeds to avail term loans and working capital loans. This would eliminate the lenders.