This is aimed at addressing the credit access issues and helping the sector to meet its financing needs for sustainable production
In an effort to address the credit access issues of the textile sector, the government is considering a credit rating system akin to Cibil and a common green fund, as per media reports. The move is aimed at helping the sector to meet its financing needs for sustainable production.
The reports noted that the ministry has sought suggestions from industry on ways to grade the enterprises’ performance in the sector. This is aimed at assessing their creditworthiness. The reports further explained that since banks are cautious in giving credit facilities to the textile sector, a Cibil score sort of a protocol would aid them to assess the sector’s requirements.
As far as the Cibil score is concerned, it is compiled by Credit Information Bureau (India) or Cibil and reflects an individual’s creditworthiness. The reports added that a Cibil-like protocol in the sector would consider issues such as long payment cycles and job work requirements of the industry.
The purpose of the combined green fund would be to make it easier for the units to secure credit and investments, as per the reports, which also explained that there are various funds for financing needs for sustainable production.
The reports emphasised that the ministry has also asked the industry about the challenges it faces in credit guarantee fund trust for micro and small enterprises. In an effort to improve the efficiency in terms of utilisation, the ministry has also suggested the monitoring of the disbursement of funds, the reports highlighted.
