Small companies' NPAs set to go up

New Delhi: Non-performing assets in micro, small and medium enterprise (MSME) sector are likely to increase as the moratorium on the repayment of term loans ends in August and these businesses are expected to cut more jobs over the next month, an industry body has said. Citing the findings of a survey, it said job losses in the sector, one of the worst hit by the Covid-19 pandemic and the lockdown, could reach as much as 45 million by end of August. Small businesses are looking for an extension of the moratorium, which the Reserve Bank of India announced in March initially for three months and then extended till August 31. Federation of Indian MSMEs (FISME) said the sector had also not been able to fully utilise the government package, in part because of banks' reluctance to lend. "The Atmanirbhar package... is not showing any positive impact on ground," FISME secretary-general Anil Bhardwaj told ET.As much as 61% MSMEs are not in a position to service loans from September, the survey conducted by Skoch Consultancy Services in association with the FISME revealed. Only 16% are equipped to serve their loans, according to the survey that covered 400 small businesses.

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