The Hindu : Andhra Pradesh / Visakhapatnam News : Loan mela for entrepreneurs

Online edition of India's National Newspaper
Friday, Jul 23, 2004

Andhra Pradesh

Andhra Pradesh - Visakhapatnam

Loan mela for entrepreneurs

By Shakeel M. Rasheed

VISAKHAPATNAM: Faced with a Rs.500-crore target loan sanctions in the current fiscal, the Andhra Pradesh State Financial Corporation (APSFC) is priming up for `spot approvals' spree for entrepreneurs in the State.

In what is coming to be an annual ritual, APSFC is launching the drive at Hyderabad on Monday, covering major cities, including Visakhapatnam, on August 2.

Billed as `entrepreneurs awareness and business development campaign', the drive, APSFC sources said, served well to market the 38 financial products of the corporation by assessing entrepreneurs' needs for expansion, modernisation, technology upgradation of existing small or medium industries or launching of new units.

For entrepreneurs, the lure apparently lies in the spot decisions that a core team of senior APSFC officials would take on the loan applications. Last time, the Vizag leg of the campaign resulted in on-the-spot sanctions to the tune of Rs.2 crores, the approvals finally adding up to Rs. 8 crores, sources disclosed.

Good response

expected

APSFC is looking to an increased response-level to its drive now, given the new additions to portfolio of products -- schemes for financial assistance for meeting seasonal working capital needs of existing good working industries and for establishing retail outlets/super baazars, and the reduced interest rate following a Memorandum of Understanding with the Small Industries Development Bank of India (SIDBI) in November last.

The sources said that an interest relief of two per cent offered by SIDBI was being passed on to the final borrower by increasing the interest rebate from the existing one to two per cent for prompt repayment. The net effective rate of interest rate of APSFC otherwise ranges from 11.25 to 13.50 per cent depending on the credit rating of the customers. With a 50 per cent market share in term lending to the SSI sector, APSFC finds nearly 75 per cent of its assistance going to the tiny/small units.

Finance for

bigger projects

Another attraction for entrepreneurs during the forthcoming campaign is that APSFC has offered to finance `bigger projects' jointly with SIDBI. The sources disclosed that the corporation was working out a strategic alliance with SIDBI for joint financing of large projects and providing enhanced assistance to SSIs for upgrading their scale of operations and graduating to medium scale industries.

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