Deputy Governor, RBI launches SIDBI’s Certified Credit Counselors [CCCs] program

Mumbai, July 11, 2017: Small Industries Development Bank of India (SIDBI) has launched a programme for Certified Credit Counselors for MSMEs. The program was launched by Shri S. S. Mundra, Deputy Governor, RBI in Mumbai on July 11, 2017 at a function attended by senior officials of RBI, banks and other stakeholders concerning MSMEs including industry associations.

The MSME sector faces several challenges in accessing credit for conversion of opportunities into business. As per the 4^th MSME census, only 7% of SMEs use financing from institutional and non institutional sources, reflecting a huge opportunity for growth of the sector through solving problems in accessing credit.

Speaking on the occasion Shri Mundra underscored the importance of developing new tools and solutions for increasing the credit flow to MSME such as Udyami Mitra and Certified Credit Counsellor. He also expressed confidence that CCCs will develop as an important link between MSME loan aspirants and lenders.

The initiative is in line with recommendations of the Deepak Mohanty Committee – “a system of professional credit intermediaries/ advisors for MSMEs, which could help bridge the information gap and thereby help banks to make better credit decisions. The credit intermediaries/ advisors could function in a transparent manner for a fee and be regulated by the Reserve Bank.” RBI had brought out a discussion paper on CCC. Identified by RBI to act as implementing & registering authority, SIDBI has formulated the Governance framework which includes an inter-institutional group comprising, SIDBI and IBA’s Certification course for CCC in partnership with IIBF, methodology for due diligence of applicants and also an online feedback mechanism to keep a control on quality of service by CCCs.

The CCCs are expected to advise the entrepreneurs by (a) offering help in preparing business proposals; (b) helping to prepare financial documents and financial statements; (c) sharing information on suitable credit instruments available in the market and (d) supporting with non–financial or semi-financial business decisions such as business expansion plans. They can also (i) recommend the business proposals of entrepreneurs to the banks; (ii) perform first level credit appraisal on behalf of the banks and (iii) collate additional supporting information required by the banks/ credit institutions.

The initiative has been formally launched by SIDBI with the identification of a few TCOs and RSETIs as institutional CCCs. Individual CCC shall also be associated with the program in due course.

The initiative is likely to usher in market linked approach in this area with the demand and supply factors leading to success of the scheme. SIDBI hopes that the supply side intervention from its side would kindle the latent demand for such advisory function and may lead to replication of international models such as BDC’s advisory services for MSMEs in Canada, seeing the light of the day in India.

Speaking on the occasion, Shri Ajay Kumar Kapur & Shri Manoj Mittal, DMDs, SIDBI also briefed the house about how the Bank has been engaged in offering institutional solutions in an evolving market. They stated that SIDBI has been constantly striving to augment credit flow to the MSME sector through various strategic initiatives. www.gst4msme.com a SIDBI-FISME initiative to assist GST adoption by MSME is one such initiative launched recently.

The Bank has launched various digital initiatives including various portals viz. smallB.in, sidbistartupmitra.in,www.standupmitra.in for Standup India program of the GoI and www.udyamimitra.in as a universal enterprise loan portal. The Mitra Portals aim at instilling ease of access to MSMEs financial and non-financial service needs.

·         These portals provide Credible Connect ( Access to 1.25 lakh bank branches and 17000+ handholding agencies across the country for application filing, preparation of project report, EDPs, skill development programmes, etc).

·         The Portal has witnessed 50322 registrations and online sanctions to 1990 new entrepreneurs covering 352 districts.

They also informed that the Bank had posted a healthy profit of Rs 1120 crore for the year ended March 31, 2017. The Bank’s gross NPA percentage declined during the year to 1.2%, from 1.51% whereas the net NPA improved to 0.44%  from 0.73% in the previous year.