Indian textiles and apparels sector saw a dip in aggregate credit, says report

The Crif High Mark-Sidbi report said credit had declined owing to the suspension of manufacturing activities in the immediate aftermath of lockdown in March 2020. The report says the number of active loans by volume in the sector, stood at 426,000 as of December 2020. (Mint) — The Crif High Mark-Sidbi report said credit had declined owing to the suspension of manufacturing activities in the immediate aftermath of lockdown in March 2020. The report says the number of active loans by volume in the sector, stood at 426,000 as of December 2020. **(Mint)**

1 min read . Updated: 08 Jun 2021, 01:35 PM IST Shayan Ghosh

The report by Crif High Mark and the Small Industries Development Bank of India the credit availed saw a 20% year-on-year decline as of December 2020

MUMBAI : Aggregate credit availed by Indian textiles and apparels industry as of December 2020 stood at ₹1.62 trillion, a year-on-year decline of nearly 20%, showed a report by credit bureau Crif High Mark and the Small Industries Development Bank of India (Sidbi).

This, the report said, was because of the suspension of manufacturing activities in the immediate aftermath of lockdown in March 2020. The report states that the number of active loans by volume in the sector, stood at 426,000 as of December 2020.

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The industry observed a quarterly decline in non-performing assets (NPAs) over the last two years, from 29.59% in September 2018 to 15.98% in September 2020. Bad loan ratio in December 2020 increased by 0.94% which is nearly 8% lower than NPAs in December 2019.

Navin Chandani, managing director and chief executive of Crif India, said that despite the pandemic, the top thirteen regions active in textiles and apparels manufacturing constituted 80% of the credit portfolio as of December 2020.

“In India, each state has a unique contribution to the apparels and textiles sector. The government of India announced a special economic package in May 2020 under the Atmanirbhar Bharat programme that is set to benefit the large number of small-scale entities, including the weavers and artisans across the country," said Chandani

The report said that over the years, apparels have contributed to the majority share of exports, followed by home textiles and fabric. However, export credit as of December 2020 stands 25% lower y-o-y, largely attributable to a decline in exports due to the pandemic.

At the state level, Maharashtra has the largest share of the credit portfolio at 25% of the credit book to the sector, it said.

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