Ahmedabad: indicates greater financial requirement to meet the working capital needs of micro, small and medium enterprises (SMEs), Gujarat has had the third highest loan guarantee scheme under emergency credit lines (ECLGS).
According to recent reports state level Bankers Committee (SLBC), Gujarat, Rs 20 862 crore borrowed under ECLG – the third highest number in India after Maharashtra and Tamil Nadu.
Guarantees worth this amount has been issued by the National Credit Guarantee Trust Limited (NCGTCL).
The bankers and industry stakeholders said that Gujarat is not only a state of heavy-weight but also is home to many SMEs, who are facing increased need money as soon as the pandemic began.
When industries are faced with higher shipping costs and raw materials, their working capital requirements increased further.
Gujarat has about 12.18 lakh SMM in 2021 July, according to data from the Ministry of SMEs proposed in Parliament.
“Gujarat is the state of manufacturing with the high number of SMEs.
Credit Emergency expanded through the granting of government guarantees given to the business came as a big driver for the industry are struggling for working capital due to the disruption induced pandemic,” said M Bansal, Convener, SLBC, Gujarat.
“Does this scheme not yet exist, the amount of non-performing assets in banks will increase as industrial units across sectors will face difficulties to survive,” adds Bansal.
Industry experts said that in addition to the handling of disruptions triggered by the locking, the cost of production and exports also rose dramatically, which also led to a fresh working capital requirements for manufacturers.
Loans from Gujarat accounted for 9.16% of Rs 2.27 Lakh Crore loans across the country, according to a report SLBC.
“Exports in the various sectors provide cushioning for most manufacturers.
While manufacturers and businesses across Gujarat take advantage of this opportunity, they face the cost of shipping and container higher.
The cost of raw materials such as cotton, yarn, steel, cement, basic chemicals, materials specialty chemicals or even coal, have increased drastically.
Most of these ingredients are not available on credit, as a result, SMEs must make a payment immediately, pushing the need for more working capital, “said Chintan Thaker, chairman, Assocham Gujarat State Council.