Credit off take by MSMEs in Coimbatore reduces
With several industrial sectors facing a slowdown of orders for almost a year now, credit offtake by the Micro, Small and Medium-scale Enterprises (MSMEs) in the manufacturing sector seems to be shrinking.
'An industry will need funds either for expansion or for a new venture. It is a widespread belief that in the last one year, MSMEs are reluctant to invest,' said M. Karthikeyan, president of the Coimbatore District Small Industries Association.
'We are talking about components and spares coming to Coimbatore in huge quantities from Gujarat as the MSMEs in Tamil Nadu, especially Coimbatore, are losing their cost competitiveness. If the current demand trend continues, more MSMEs in Coimbatore will go out of business,' added C. Sivakumar, president of the Coimbatore Tiruppur District Tiny and Micro Enterprises Association.
Industries faced a slight drop in business in 2023-24. Instead of a revival, the situation worsened last fiscal. This year, demand is dull in the first month and there is no sign of a orders picking up. So, MSMEs do not want to invest in such a scenario, said Mr. Sivakumar.
Offtake of bank loans in Coimbatore by MSMEs was nearly ₹35,500 crore in 2024-25. Even in February this year, the offtake was slow and several industry associations organised loan melas. The interest rate offered by the lenders in the non-banking financial sector (NBFCs) is competitive now for machinery purchase too and many MSMEs are moving to the NBFCs for loans, said Mr. Karthikeyan.
The Potential Linked Credit Plan for 2025-26 envisages almost the same disbursement as last year by the banks for MSMEs. Coimbatore District Collector Pavankumar G. Giriyappanavar said the annual credit plan for Coimbatore for the current financial year would be released in the second week of May.
Industry leaders say Coimbatore MSMEs require focused support packages to help them revive.
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