10% Additional Credit Assistance to MSME – TEA writes to Finance Ministry

Raja. M. Shanmugham, President of Tirupur Exporters Association(TEA) has sent a letter to the Union Finance Minister Nirmala Sitharaman requesting 10% additional credit assistance to the MSMEs without any precondition for restructuring.

The association has also thanked the ministry for various measures in favour of the exporters. According to the statement, the additional credit assistance of up to 10% of Credit outstanding as on 29th February 2020 is eligible only to the units which go for restructuring as per RBI Notification on Resolution Framework 2.0 – Resolution of Covid-19 related stress of MSMEs.

For repayment, the overall tenor has been fixed 5 years, comprising repayment of interest only during the first 2 years and interest and principal in 3 years thereafter. It is also mentioned that the K.V.Kamath Committee has identified the Textile Sector as one of the financially stressed sectors. The association stresses the fact that would substantiate the report that the ready-made garment sector comprising 95% MSMEs is facing a host of issues including liquidity and the impact of the second wave of the pandemic.

“The MSMEs which are not interested to go for restructuring, have also to be supported with Additional Credit Assistance of up to 10% of the outstanding as on 29th February 2020 to MSMEs borrowers covered under ECLGS 1.0 and the tenor can be fixed as 5 years, comprising repayment of interest only during first 1 year and interest and principal in 4 years thereafter,” the letter read.

Considering the liquidity crisis being faced by all MSMEs, the association has requested the Union Minister of Finance to kindly announce a measure that Additional Credit Assistance up to 10% to all needed MSMEs, irrespective of any precondition for restructuring. Apart from the above, they have also listed down a few other requests.

Implement the exact RoDTEP rates to the knitwear garment exports sector as proposed by G.K.Pillai Committee expediently as the RMG Sector is operating under a wafer-thin margin due to severe competition in the global market and struggling of the exporting units to sustain in the business. Please advise disbursing the pending amount immediately.

Extension of Interest Equalisation Scheme for next 3 years, as the extension was announced only for 3 months, which expired on 30th June 2021 itself, to enhance our competitiveness in the global market.

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