TIHCL nurses 67 MSMES back to financial health

Of the 67 units that it has aided, 30 of them involved financial support while the 37 needed strategic consulting and mentoring support

By   |  Published: 4th Sep 2020  12:03 amUpdated: 4th Sep 2020  12:48 am
The industrial clinic received 220 cases, out of which 118 proposals did not have any potential for revival.

Hyderabad: The Telangana Industrial Health Clinic Limited (TIHCL) has so far helped 67 MSMEs revive and in the process restored the livelihoods of about 1,800 people, according to B Yerram Raju, director, TIHCL. In all, it has got 220 cases so far and of these 12 have been wilful defaulters, whose applications were rejected and ten cases have been found unviable. As many as 118 proposals did not have any potential for revival. Of the 67 units that it has aided, 30 of them involved financial support while the 37 needed strategic consulting and mentoring support.

“We handhold the units for one year or till such time we feel that they are following regulations well and are fully recovered,” he said. TIHCL negotiates with concerned banks the revival packages and if needed, co-finance the margin amount required. In case incentive release is not possible within reasonable time, TIHCL will sanction 75 per cent of the incentive as bridge finance.

“Stressed entrepreneurs are examining their options considering the market movement of their production. Some are thinking of moving to new products while a few others are looking at the processes,” the official said.

Citing an instance, he said one enterprise — Surya Industries, set up in 2013 to make PVC pipes and sheets and book binding products, struggled for repayment of instalments due to increase in GST slab from 5 per cent to 18 per cent and delay in receivables. It also suffered a high debt burden of term loan EMIs and a higher interest rate. Subsequently, the account slipped into NPA. TIHCL offered bridge finance against the sanctioned investment subsidy. “The unit has been performing well as the interest repayment burden is reduced since TIHCL interest charges are less when compared to the bank,” said Raju.

In another case, Rojas Industries, which was into manufacturing of beauty products, availed a term loan of Rs 75 lakh from Start Up India Scheme. Later, an additional loan was sanctioned under CGTMSE for machinery to handle export orders. There was a delay in disbursements of the loan, which led to delay in purchasing of machinery. The export order was cancelled due to delay. However, the entrepreneur was left with the machinery and the loan to be repaid. The account with the bank became irregular.

The TIHCL team found out that mixing up the accounts of her training school and manufacturing were affecting the business adversely. It advised her to initiate discussions with the bank using the RBI order that said accounts which were standard as on 01.01.2019 were eligible for restructuring of their loans. The bank restructured the loan by reducing the EMI and extending the tenure by an additional 36 months. “Here, TIHCL did not provide any financial assistance but resolved the case through educating the entrepreneur on the ways of maintaining the financial discipline and providing a way of dealing with the bank,” Raju said. Today, Rojas also ventured into hand sanitisers and hand washes and is able to procure more orders from the Indian defence forces. She has employed more than 50 women, who got trained in her beauty school, Raju said.

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