Financial Daily from THE HINDU group of publications
Saturday, Nov 16, 2002
Industry & Economy
Knitwear & Hosiery
Tirupur cos availing of Italian loans
THE Rs 20-crore Italian line of credit now in operation for the small and medium enterprises seems to have made headway in Tirupur-based textile hub, with at least ten companies showing interest in availing of the credit for machinery imports.
While the credit for machinery imports worth Rs 1.5 crore has been cleared for one textile company in Tirupur under the Indo-Italian credit line, two other manufacturers have submitted papers seeking Rs 3.5 crore to import knitting machines from Italy, sources in the National Small Industries Corporation Ltd (NSIC), the nodal agency to handle the line-of-credit, said.
The Italian line of credit with a soft-loan element is made available for the SMEs of eight different sectors including textiles, leather and automobile and NSIC is extending the line of credit in rupee to the beneficiary industries.
However, the soft-credit package with a 9 per cent interest tag seems to have come at the right time for the textile entrepreneurs seeking to invest on modern equipment, especially in Tirupur.
The funding under the line of credit programme has become attractive particularly after it has been recently included into the Central Government sponsored textile technology upgradation fund (TUF) scheme.
The extension of the TUF benefit that gives 5 per cent interest subsidy to the funding done under the Indo-Italian line of credit too has partly pepped the scheme operation as the final interest payable by the units availing of the funds under this route would be 4 per cent, sources said.
To make this line of credit more acceptable among the enterprises, NSIC with the concurrence of the Italian Government has brought about relaxation in eligibility norms for availing of the credit by the units. The minimum fixed investment of the units seeking loan, originally fixed at Rs 46.78 lakh, has been brought down to Rs 15 lakh.
Similarly, the minimum quantum of single loan that could be given to a beneficiary had been brought down to Rs 10 lakh against the originally fixed Rs 20.30 lakh, the sources added.
The textile industry sources say that the off-take of the Indo-Italian line of credit has got indirect boost with the Italian textile cluster, Treviso, seeking greater interaction with Tirupur-based hosiery units.
The Treviso knitwear producers are also looking at the scope for outsourcing supplies from Tirupur, and this has also imparted momentum to interest in the line of credit.
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