K Srikanth, managing director of Alfa Rubber & Springs on Thursday said struggling micro, small and medium enterprises (MSMEs) face increased paperwork for applying loans from the banks.
In an interview to CNBC-TV18's Shereen Bhan, Srikanth said "There have been two packages that have been announced. One is 10 percent working capital loan and second package is 20 percent working capital term loan. If you look at the 10 percent working capital loan, CII and various other associations have done snap polls and the result of the poll is that only 30-40 percent of the maximum have benefited from these loans, there still remains a large amount of people who have not benefited."
"If you look at the 20 percent working capital term loan, the reality is that the banks have been left to administer the loans as per their wisdom and so they have to do their due diligence. This has always been the problem with MSMEs in the country that what is mandated is one issue and when it comes to execution we get stuck with a lot of paper work," he added.
Srikanth, also the convenor of the CII MSME Panel in Tamil Nadu, said, "Rs 3,000 crore of new loans have been released yesterday as per the finance minister's office tweet. However, Rs 3,000 crore have gone to good units not to the struggling units."