ACMA signs MoU with SIDBI for easy credit access for component MSMEs

March 14, 2013, New Delhi: ACMA, the apex body of the automotive component industry in India, with a membership of over 670 manufacturers, has signed an MoU with SIDBI for easy credit access for its members. An expert from SIDBI will facilitate credit and loans to ACMA members. This process will be conducted once a week at the ACMA office for both, capital and working capital.

The MoU was sogmed at the 2nd MSME Summit on ‘Innovation’ held today in the capital. Inaugurating the Summit, Madhav Lal, Secretary, MSME, said: “The MSME sector is a key driver of nation’s industrial output. The Indian auto component industry needs to invest in technology, R&D, and new product development to surmount the challenges posed by emission norms, diminishing oil supply and increasing fuel prices. The government understands the need for technology in the MSME segment and hence special emphasis has been given in the 12th Five-Year Plan.” At present, there are 2.6 million MSMEs in the country across various sectors, with the automotive space dominated by them; in ACMA out of the total membership base of over 670, over 70 percent fall in that category.

Speaking on the challenges of the MSME sector, Surinder Kanwar, president, ACMA, said, “The key challenges faced by MSMEs are similar to those of the large enterprises. But considering the relative smaller size of the sector, the issues become more pronounced whether these relate to access to capital or access to technology. I believe that this MSME summit would help in streamlining and resolving growth and exploration in newer dimensions”.

One of the key stumbling blocks in the growth of the MSMEs is access to capital and the cost of capital. It is in this context that the in the recent Union Budget the government has announced a proposal to enhance the refinancing capability of SIDBI from Rs 5,000 crore to Rs 10,000 crore per year.

Sunil Arora, chairman- MSME Summit, expressing his opinion on innovations, said: “Innovation has to be a three-dimensional coordinated activity between the government, the industry and the academia. Industry–Institute tie-up is an essential part of the eco- system wherein institutes provide basic and applied research input. It is with this objective, the MSME Committee of ACMA has taken this initiative of bringing the three stakeholders together for this MSME summit”.