To boost the micro, small and medium enterprise (MSME) textile and garment industry in the country, the Small Industries Development Bank of India (SIDBI) signed two important MoUs with the Clothing Manufacturers' Association of India (CMAI) and the Sachin Industrial Co-operative Society.
Designed to provide financial and technical support to textile industrialists, these MoUs enable them to access collateral-free loans and government assistance programs.
The MoUs specifically focus on providing assistance for textile sector upgrades, including the repair and modernization of water jet and air jet machines, as well as advancements in the garment sector.
The MoUs provide textile entrepreneurs with an access to direct loans without needing collateral. If they lack collateral, they can secure a loan by depositing just 25 per cent of the total loan amount. The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme previously offered collateral-free loans up to Rs 5 crore, but this limit is set to increase to Rs 10 crore.
Under this scheme, CGTMSE will provide funds of up to 90-95 per cent. For loans up to Rs 5 crore without collateral, only 25 per cent of the amount needs to be shown as an investment. Interest rates will range from 8.75 per cent to 9.75 per cent, depending on the unit's credit rating. SIDBI's funding process for new units will be completed within 30 to 45 days.
Mayur Golwala, Secretary, SICS, explains, CMAI and SICS will establish SIDBI support centers in their offices. Dedicated staff at these centers will assist entrepreneurs with loan applications and the processing of those applications. SIDBI will provide both financial and technical support to these centers.
