The Reserve Bank of India’s (RBI) 7 per cent GDP growth is not achievable if banks are not prepared to take risks and lend to first-generation entrepreneurs, say industry players.
It’s tough to convince bankers to provide loans. While retail loans are flourishing, bankers are slow in offering loans to entrepreneurs, they add.
“What’s the point of increasing loans to well performing small-scale industries (SSIs), if we are unable to get loans from banks even with viable projects,” says a first-generation entrepreneur.
RBI in its credit policy has permitted banks to lend without collateral to established SSI units, up to Rs 25 lakh.
“When credit is not reaching the SSIs, who are backbone of our economy, there’s no point talking about bullishness and expecting the feel-good factor to continue for ever,” says SK Bijlani, a Chandigarh-based management consultant for manufacturing firms.