STAFF REPORTER
GUWAHATI: It has come to light that banks are reluctant to give loans for local entrepreneurs under the Prime Minister's Employment Generation Programme (PMEGP) scheme in view of around 30 per cent of previously-sanctioned loans resulting in non-performing assets (NPAs).
This fact emerged during discussions on Saturday between Assam's Industry and Commerce Minister Bimal Bora and State of India's Circle Head (NE), Arvind Kumar Singh, officials of the Central Bank and Assam Gramin Vikash Bank, as also officials of the Khadi and Village Industries Commission (KVIC), which is the nodal agency for implementing the PMEGP scheme.
The Minister appealed to the bank authorities to sanction the loan component for proposals under the scheme so that the youth of Assam could gain-self-sufficiency by establishing micro and small industrial units. He said that the government provides up to 35 per cent of the required funds by way of subsidy and requested the bank officials to sanction the remainder as loans to the aspiring youths of the state.
"During the discussions, the bank officials mentioned the high percentage of bad loans in the recent past under the PMEGP. It is natural that banks will become hesitant to provide new loans in such a scenario. We are taking this issue seriously and we will evolve a solution to the problem thorough discussions in view of the fact that the Centre has earmarked Rs 1,000 crore for Assam under this scheme during the extension period," Bora said.
It may be mentioned that the Centre has extended this scheme for another five years till 2025, with an outlay of Rs 13,554 crore.
In the last five years, the number of beneficiaries targeted under this scheme in Assam was 24,583, but the physical achievement was 15,190 beneficiaries.
Official sources said that there are several reasons for the slow take-off of the PMEGP scheme in the state despite the presence of considerable possibilities. They said that lack of proper awareness is an important factor. Secondly, there are several instances of banks delaying the disbursal of loans, as a result of which aspiring entrepreneurs experience loss of time and motivation to start their respective businesses. Thirdly, there is a dearth of skilled labour in the state. Moreover, there are shortcomings when it comes to availability of infrastructure and the required mindset among new entrepreneurs.
The sources further said that the authorities concerned have also failed to provide the required market for the goods produced by these new entrepreneurs.
Officials of the Industry Department, however, pointed out that a section of such entrepreneurs is doing a good job in spite of all the odds. They added that the situation created by the Covid pandemic in the last two-three years may have contributed to the emergence of NPAs under the PMEGP scheme in the state.
The officials said that the department is now focusing on involving as many budding entrepreneurs as possible under the PMEGP scheme during the extension period till 2025.
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