Gujarat: GCCI seeks soft loan for fund-starved MSMEs

Stating that fund-starved MSMEs in Gujarat are “facing survival issues” due to restrictions posed by the Covid pandemic, the Gujarat Chamber of Commerce and Industry (GCCI) on Monday wrote letters to Union Finance Minister Nirmala Sitharaman and Union minister for MSMEs Nitin Gadkari, seeking a soft loan for the smaller players.

“Last year when similar conditions prevailed, an additional working capital finance of 20 per cent of the outstanding credit was provided in form of a term loan at concessional rate of interest without any guarantee or collateral. We humbly request that this year, too, an additional working capital finance of 20 per cent of the outstanding credit as on March 31, 2021, over and above the limit sanctioned last year should be provided,” Natubhai Patel, president of GCCI, stated in the letter.

“Due to restrictions imposed as part of partial lockdown, the inflow of funds is very less and therefore this type of soft loan will be very effective and helpful,” the letter added.

A number of manufacturing units in Gujarat, especially in the MSME sector, have been shut ever since industrial oxygen was being diverted for medical use. Apart from this, GCCI officials said a number of smaller units have been functioning with minimum capacity and have been facing poor demand and high cost of raw materials.

In addition to the soft loan, GCCI also told the Union ministers that there is a “need to extend the number of days for a bill to be discounted from 90 to 150 days, which will enable the working capital cycle to operate smoothly”.