Government Support Ladies and Gentlemen, it has been extremely encouraging to note the growing support by Government for our MSME sector. Several years ago the State set aside funds with the Reserve Bank to establish a credit guarantee scheme covering loans by financial institutions to eligible small and medium businesses. Interest charged on these loans must not exceed 10 percent per annum.
Indicators of asset quality, measured by the Non-performing loan (NPL) ratios hit a peak of 20 percent in February 2010, declining to 16.5 percent in September and 16.9 percent by end October. 28. The declining trend in the aggregate NPL ratios has given rise to a gradual easing in credit conditions since August.