Mumbai, July 3 -- Doubts about a demand recovery are prompting small businesses to avoid fresh loans despite a governmentguaranteed liquidity programme of '3 trillion, bankers said. Even those micro, small and medium enterprises (MSMEs) that have received fresh loan sanctions are reluctant to draw funds, putting lenders in a spot.
While public and private sector banks have sanctioned loans worth over '79,000 crore under the emergency credit line guarantee scheme as of 20 June, only a little over '35,000 crore was disbursed, official data showed.
"Despite loans worth '18,000 crore being sanctioned, people have not drawn the full amount and even if they have drawn, they have put it in their cash credit account because they are not sure how ...