Pune, Jun 10 (KNN) Maharashtra State Cooperative Bank Chairman Vidyadhar Anaskar has called for a fundamental shift in how cooperative banks approach lending to micro, small and medium enterprises.
Speaking at the Banking and MSME Sector Conclave 2025 in Pune on Sunday, Anaskar emphasised that lenders should move away from their traditional focus on security collateral toward project-based financing models.
Anaskar criticised the current practice of many banks requiring personal property as collateral for MSME loans, stating that this approach contradicts the core intent of MSME financing.
The conclave was jointly organised by Sahakar Bharati and Global Indian Origin Network, bringing together industry stakeholders to discuss challenges in the sector.
Dinesh Gandhi, Chairman, Sahakar Bharati, highlighted the critical economic importance of the MSME sector, noting that it supports approximately 11 crore families across the country, making it one of India’s most significant employment generators.
Regarding real estate lending, Anaskar identified the housing segment as particularly attractive for cooperative banks due to its potential for better returns and higher repayment assurance.
He attributed this to the established goodwill of developers who maintain good business practices, while noting that property itself provides strong collateral security for such loans.
However, Anaskar pointed out significant limitations in commercial real estate lending, explaining that the sector does not qualify as a priority sector under Reserve Bank of India classifications.
He attributed this restriction to the dual financing nature of real estate projects, where developers receive funds both from buyers during construction phases and through bank loans.
The MSCB chairman also called for improved cooperation from auditors and accounting consultants to streamline project financing processes.
Meanwhile, Indraneel Chitale, managing partner of Chitale Bandhu Mithaiwale, raised concerns about bureaucratic obstacles facing first-generation entrepreneurs who typically start as micro and small enterprises.
Chitale emphasised that excessive paperwork requirements during the loan application process prevent business owners from focusing on developing their enterprises.
He urged banks to reduce administrative barriers to enable entrepreneurs to concentrate on business growth rather than documentation procedures.
(KNN Bureau)
