The Kashmir Chamber of Commerce and Industry (KCC&I) has urged for enhanced access to credit and greater awareness regarding digital financing platforms for Micro, Small and Medium Enterprises (MSMEs) in Jammu and Kashmir and Ladakh. The Chamber’s recommendations were presented during the 70th meeting of the Empowered Committee on MSMEs for the Union Territories, held in Jammu.
The Chenab Times has learned that representatives from the KCC&I highlighted critical issues affecting MSMEs, including startups, tourism-linked enterprises, handicraft businesses, and small industries across the region. A primary concern raised was the acute lack of awareness surrounding the Trade Receivables Discounting System (TReDS), an RBI-regulated digital platform designed to provide MSMEs with working capital through collateral-free discounting of trade receivables and invoices.
During the meeting, the KCC&I emphasized the significant potential of TReDS to improve liquidity by enabling suppliers to receive timely payments from corporate, public sector undertakings (PSUs), and government departments. However, the Chamber noted that awareness among MSMEs in Jammu and Kashmir remains exceptionally low, hindering their ability to leverage this system to address severe liquidity constraints.
Farooq Amin, JVP of KCC&I, stated that enhanced awareness and outreach programmes for TReDS could have substantially aided businesses facing liquidity challenges. The Chamber urged banks, financial institutions, TReDS operators, and government departments to conduct aggressive awareness campaigns across industrial estates and business clusters within the Union Territory.
Responding to the concerns, Chandrashekhar Azad, Regional Director of RBI Jammu and Kashmir, reiterated the mandatory requirement of Udyam Registration for MSMEs to access various government and RBI-supported schemes. He directed banks to intensify awareness about Udyam Registration and instructed the KCC&I to actively participate in these campaigns to ensure wider outreach among entrepreneurs.
The RBI Regional Director also advised banks and TReDS-related institutions to increase publicity for the platform among MSMEs and industrial units throughout Jammu and Kashmir. The KCC&I also voiced significant concerns regarding the low disbursement of loans under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme in the region. Despite the scheme’s aim to facilitate collateral-free loans, entrepreneurs continue to face demands for collateral security, personal guarantees, and complex banking procedures.
The Chamber observed that loan disbursement figures under MSME schemes in Jammu and Kashmir are considerably lower compared to other regions, necessitating corrective interventions. The KCC&I underscored the prevailing unemployment situation, highlighting the need for easier access to low-interest credit and simplified financing procedures for startups, young entrepreneurs, and existing businesses. The Chamber appealed to banks to provide financial assistance under flexible, entrepreneur-friendly norms, without excessive insistence on collateral and guarantees.
Furthermore, the KCC&I called for a shift in the objective of MSME financing to encourage entrepreneurship and economic activity, rather than creating procedural hurdles that deter genuine business initiatives. The Chamber also raised issues concerning rigid banking practices, particularly the over-reliance on CIBIL scores and technical classifications, without adequately assessing the unique circumstances faced by businesses in Jammu and Kashmir.
Sectors like tourism and allied industries have faced repeated economic setbacks due to unforeseen developments, including disruptions affecting business activity and repayment capacity. The KCC&I urged banks and financial institutions to adopt a pragmatic and humane approach when dealing with stressed MSME accounts, avoiding coercive recovery practices, public shaming, and harsh classifications that further harm distressed enterprises.
The Chamber strongly advocated for dignified and consultative resolution mechanisms for entrepreneurs facing genuine financial distress. The KCC&I demanded inclusion in consultative committees that handle stressed MSME accounts and Non-Performing Assets (NPAs) to facilitate collective problem-solving between banks, entrepreneurs, and trade representatives. The RBI Regional Director encouraged banks to collaborate more closely with KCC&I to resolve issues related to collateral, MSME distress, and financing bottlenecks.
The KCC&I also highlighted the importance of the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, which offers 100 per cent government-guaranteed, collateral-free additional credit support to MSMEs, stressing the need for wider awareness and easier access for businesses affected by economic distress in Jammu and Kashmir.
Additionally, the Chamber pointed out high rejection rates under various self-employment and livelihood generation schemes, including PM SVANidhi, PM Mudra Yojana, and PM Vishwakarma Yojana. Many deserving applicants are reportedly unable to avail benefits due to procedural delays, documentation issues, and a lack of awareness at the implementation level. The KCC&I sought a comprehensive review of rejection patterns to ensure eligible beneficiaries receive institutional support.
The KCC&I appealed to all MSMEs, startups, entrepreneurs, traders, artisans, and industrial units in Jammu and Kashmir to complete their Udyam Registration at the earliest to benefit from government schemes, RBI initiatives, institutional financing programmes, and credit support mechanisms.
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