Report by Orissadiary correspondent; Bhubaneswar : Orissa State Financial Corp (OSFC) has tied up with Small Industries Development Bank of India (SIDBI) in presence of Chief Minister Naveen Patnaik and Industries Minister Raghunath Mohanty on Monday in the Orissa Secretariat to strengthen credit flow into the small and medium enterprises sector in the state. Managing Director of Small Industries Development Bank of India (SIDBI)R.M.Mala and Industries Department Secretary Saurav Garg and K.N.Khatei of Orissa State Financial Corporation (OSFC) has signed the MoU.
As per the agreement, SIDBI will provide re-finance facilities for the development of small scale industries at concessional rate.
OSFC has not been able to draw any refinance from SIDBI since 2003 because there was no fresh lending from 2003 to till date. This has affected the development of the small scale industries in the state .Now OSFC has become an eligible institution to get refinance.'
Last month, the state government had signed an agreement with Central Bank of India for the development of micro, strengthen credit flow into the small and medium enterprises (SMEs) sector in the state.
The MoU comes as a part and parcel of a restructuring package approved by the Cabinetunder the Chairmanship of the Chief Minister Naveen Patnaik. As per the Cabinet decision, the state government has infused Rs 254 crore to settle SLR bond and also converted the same to share capital. It has also converted loan of Rs 40 crore to share capital after waiving the accrued interest thereon.
With this, OSFC became eligible to get refinance from SDBI as it has a positive net worth and capital adequacy of 6.25 per cent.
Speaking on the occasion, Chief Minister Naveen Patnaik said the state government had taken a number of steps to provide support to micro, small and medium enterprises in the state.
“The MSME Policy, 2009 provides for a conducive environment to the micro, small and medium enterprises. Recently, a MoU has been signed with the Central Bank of India to improve the credit flow to this sector,” the Chief Minister said.
Stating that upcoming large projects in the state had been instructed to develop downstream and ancillary enterprises, the Chief Minister claimed that this would help provide an opportunity to young people to set up their units. Every year, about five thousand new enterprises are being registered in the MSME sector. This requires provision of credit and skill upgradation. The chief minister said the recent restructuring of the sick OSFC by infusion of total Rs 352 crore had once again made the financing institution a vibrant entity to support the MSMEs.