The Micro and Small Enterprises (MSE) sector in India which is one of the important engines of growth in the economy has had to unexpectedly face the financial crisis at a time when things were looking bright and positive. It is largely to the credit of the forceful economic stimulus packages initiated by the Government of India, sound regulations, financial supervision and other impactful policy measures by the Reserve Bank of India that the concerns of the MSE sector have been broadly addressed. The MSEs on their part have also exhibited strong resilience to the economic slowdown and are quickly repositioning themselves to face the future with a new sense of confidence and optimism.

It is time for banks and financial institutions to fine tune their lending strategies to the MSE sector and to innovate the same by suitably incorporating de-risking measures so as to continue to finance the sector more vigorously. The financial and business risks of lending to MSEs have to remain within manageable limits through a judicious mix of stringent appraisal and guarantee interventions. There is a new hope and the prospects for the economy during FY 2010 appear to be optimistic. Early signs of revival in certain sectors of the economy combined with low inflation and higher Government spend on infrastructure, primary health, education, rural development, employment generation programmes and other focus areas promise a new hope for the common man. CGTMSE on its part is deeply committed to pursuing this development agenda by accelerating the guarantee coverage during FY 2010 and providing the requisite stimulus for institutional lending to the MSEs in larger measure.

In the coming years, CGTMSE would continue to strive relentlessly to bring about a transformation in banks' lending to MSEs by providing overwhelming support and incorporating confidence building measures in its operations to make collateral-free lending to MSEs the most preferred and profitable option.

I take this opportunity to thank the Government of India, RBI, SIDBI, all Member Lending Institutions and MSE entrepreneurs for their continued support and co-operation. Lastly, the team at CGTMSE deserves special appreciation for their praiseworthy performance.