CITI calls for suggestions from MSME textile units on measures to alleviate the financial stress they face
The Ministry of Textiles has done a detailed study on the credit access issues of the textile sector and the Textiles Secretary recently held a roundtable discussion on 'Credit Access Issues in the Textile Sector' to explore the potential solutions in consultation with industry, financial and policy institutions.
It was pointed out at the meeting that the working capital needs for the textile industry are not captured well by the banks. The bank should understand better the long payment cycle, job work requirement, etc., and the other nuances of the textile industry and ensure that the industry has better access to bank credit.
The risk perception in the textile industry is said to be another major deterrent, given the present rating systems, which are not textile centric. The Secretary sought suggestions from the stakeholders for a textile specific credit rating protocol.
There are separate funds for various financing needs for sustainable production, like the energy efficiency fund, the water management fund, etc. There should be a consolidated 'Green Fund' for such investments in the textile sector.
The stakeholders suggested that there should be a mechanism to monitor and ensure the industry has access to the Credit Guarantee Fund for Micro and Small Enterprises (CGTMSE) system. The industry reported problems in accessing and low utilisation of the fund. There should also be cluster-level credit facilitation centres.
The industry can submit more suggestions so that the MSME units have better access to funds, the Confederation said.
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