The Biz Reporter
Srinagar: The Kashmir Chamber of Commerce and Industry (KCCI) today strongly stressed the need for proper and effective implementation of the Credit Guarantee Scheme for MSMEs in Jammu & Kashmir so that entrepreneurs can avail collateral-free and guarantee fee-backed loans to start and grow their businesses, generating much-needed employment across the region.
KCCI President Javid Ahmad Tenga, accompanied by Executive Committee Member Ashiq Hussain Shangloo, presented a detailed memorandum to Mr Tiruchi Siva, Chairperson of the Department-Related Parliamentary Standing Committee on Industry, and other MP members, during the Committee’s ongoing review of Credit Guarantee Schemes for MSMEs in Jammu & Kashmir.
“Banks are still demanding collateral from borrowers even for loans fully covered under the Credit Guarantee Scheme. This defeats the entire purpose of the scheme. Young entrepreneurs in Kashmir must be able to access credit without pledging their homes and properties,” said KCCI President Javid Ahmad Tenga. “We urge the Standing Committee to direct RBI to enforce collateral-free lending strictly and hold non-compliant banks accountable.”
During the meeting, KCCI presented detailed bank-wise figures on the performance of scheduled commercial banks under the Credit Guarantee Scheme in J&K for three consecutive financial years — FY 2023-24, FY 2024-25, and FY 2025-26. The data revealed a stark and deeply concerning picture: while the overall coverage has grown from Rs. 6,110 crore to Rs. 9,830 crore over three years, the distribution among banks is alarmingly skewed.
KCCI lauded the outstanding contribution of J&K Bank, which alone accounts for over 66 percent of all credit disbursed under the Credit Guarantee Scheme in J&K — a testament to the bank’s deep local outreach and commitment to the MSME sector. However, KCCI expressed serious concern over the negligible participation of several major national banks.
The memorandum called for annual audits of all banks in J&K to assess their compliance under the CGTMSE scheme and recommended time-bound loan disposal — 21 days for loans up to Rs. 25 lakh, 30 days for loans up to Rs. 2 crore, and mandatory written rejection reasons in all declined cases. KCCI also urged enhancement of the guarantee cover to 90 percent for J&K MSMEs on loans up to Rs. 5 crore for 10 years, a 50 percent reduction in annual guarantee fees for five years, and 100 percent guarantee cover for women entrepreneurs and registered artisans.
KCCI also raised the issue of the New Central Sector Scheme (NCSS) for Industrial Development of Jammu & Kashmir, notified by the Department for Promotion of Industry and Internal Trade (DPIIT) in February 2021 with a total financial outlay of Rs. 28,400 crore and a duration running through 2036-37. The scheme was aimed to attract new investment, nurture existing industry, and drive job creation and skill development in J&K.
KCCI demanded an additional allocation of Rs. 75,000 crore under the NCSS with a dedicated 25 percent reservation for local entrepreneurs, to specifically address the large backlog of eligible but credit-starved J&K businesses that have been unable to register or benefit under the scheme since its launch.
Javid Ahmad Tenga emphasised that Kashmir has a young, skilled, and entrepreneurially motivated population that only needs fair access to credit and institutional support to build sustainable businesses and create employment. He expressed hope that the Standing Committee’s intervention would translate into meaningful and time-bound policy reform for J&K’s MSME sector.
