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PIPDIC to sign pact with rating agency

PUDUCHERRY: The Pondicherry Industrial Promotion Development and Investment Corporation will soon enter into an understanding with a rating agency to evaluate the performance of small and medium enterprises (SMEs) in the Union Territory.

“Talks are on with premier rating agencies, including CRISIL. We will sign an agreement with the agency to rate the small-scale industrial units,” Managing Director of PIPDIC E. Vallavan told The Hindu. A slew of policy measures were taken at the recently held board meeting and appointment of a rating agency was one among those decisions, he added.

Appointment of a rating agency had a two-way effect. The rating would help PIPDIC get better understanding of the functioning of units that were financially supported by the corporation. Understanding the financial management and production capacity of the units would help PIPDIC in its recently launched drive to recover loans provided to entrepreneurs.

For the entrepreneurs, a rating by an acclaimed agency would help them market their products in a better way. An evaluation of their performance would, in turn, also help them adopt corrective steps to strengthen the financial position, Mr. Vallavan said.

The proposal for rating was mooted by the National Small Industries Corporation and they would incur 75 per cent of the expenditure involved in the rating process. The remaining had to be incurred by the entrepreneur.

So far, more than 3,600 small-scale industrial units had been assisted by PIPDIC and 23 applications were pending for setting up SMEs. Since inception of the Corporation, a sum of Rs.370 crore had been disbursed to entrepreneurs.

The loan to be recovered comes to around Rs.125 crore, including principal amount to the tune of Rs.75 crore.

For the first time, an exclusive team to recover the due had been constituted in the Corporation. The drive had yielded results, with PIPDIC collecting Rs.13.75 crore till October 12, compared to Rs.7.14 crore collected during the same period last year.

Mr. Vallavan also informed the board's decision to relax the process to apply for loan. There would be two forms, one for loan amount up to Rs.25 lakh and the other for above Rs.25 lakh.

Discarding the old method of getting a project proposal from the applicant to disburse the amount, the application would contain a separate section for providing detailed information about the purpose for availing loan.

To avoid delay in clearing the loan, a group of advocates appointed by PIPDIC would verify the documents and applicants seeking up to Rs.25 lakh would be informed within 21 days on the status of the application. Applicants seeking loan above Rs.25 lakh would be informed within two months, he said.

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