Murugan and his brother have a micro unit with three milling machinery at Ganapathy. They started the unit in 2010, investing their savings, and provide employment to six workers. They have a current account with a bank for the last 10 years and have never taken a loan.
“The two-month lockdown was a challenging period. We need to pay our workers and need funds to buy raw materials. So I approached the bank for loan,” says Mr. Murugan.
However, the bank has refused support under the Emergency Credit Line Guarantee Scheme. “They want to support only those who have taken loans already. I have all the documents that the bank needs. I visited the bank twice recently for loan, but they are not willing to support,” he adds.
Though orders are not an issue for Murugan, he is struggling to mobilise funds to buy raw materials and to pay his workers.
Similarly, Veerasekaran, who has a plastic moulding unit, said he had an account in a bank for nearly two decades and the officials knew all about his business and transactions. “When I go for loan, they are not helpful. They ask for collateral. I want money now because I need to pay rent. But I am unable to get the additional loan that the Central government has announced from the bank as I do not have cash credit account. If I had that support, resuming operations will be a lot easier,” he says.
According to C. Sivakumar, president of Coimbatore and Tiruppur District Tiny and Micro Enterprises Association, those who have current accounts need working capital now. But, the banks have not supported such units so far.
“We have spoken to all the regional heads of the banks. We are collecting the documents from such members. Our (the association) office-bearers are also talking to such units and the banks. We have also appealed to the banks to support such units by looking at just one year’s IT returns and not to ask for the returns filed for three years,” he said.
Members of the Federation of Coimbatore Industrial Associations met the District Collector K. Rajamani on June 9 and explained the problems faced by the micro units.
They pointed out that the banks were not coming forward to support the units that had taken loans less than ₹10 lakh without any collateral. Further, non-banking financial institutions and private banks were not willing to support the micro units through the scheme announced by the Union Finance Minister. Coimbatore District had more than 20,000 units that had only current account in the banks and they were not getting support under the Emergency Credit Line Guarantee Scheme
“The Collector has assured his support to help the micro units get benefits under the Emergency Credit Line Guarantee Scheme,” said J. James, president of Tamil Nadu Association of Cottage and Tiny Enterprises. “We will collect details from all our members who have current account and will submit it to the district administration so that the officials can help these units get the additional loans,” he added.