In a bid to facilitate cheaper credit access to micro, small and medium enterprises, Public-sector lender, Canara Bank has signed a Memorandum of Understanding with industry body CII.
Under the MoU, Canara Bank shall extend a concessional credit of 50 basis points on the applicable card rate of interest to MSME units which are members of CII, said the media report. Besides, rebate of 50 per cent in the processing or upfront fee will also be given to the unit owners, Canara Bank, Executive Director, P S Rawat told media.
Stating that the bank would focus on lending to MSME sector, Rawat said Canara bank is targeting over 24 per cent growth in advances to micro, small and medium enterprises with lending of Rs 50,000 crore in 2013-14 as against financing of Rs 37,000 crore in last fiscal.
According to CII report, only 25 per cent of total funding in case of MSME sector comes from banks and financial institutions, while rest is arranged from other sources, including internal accruals and friends.
Besides, Canara Bank has launched two lending schemes MSE 'Pragati' and MSE 'Unnati' under which the bank is financing to MSME sector without any collateral security on third party guarantee.
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