The Andhra Pradesh State Financial Corporation (APSFC), the state-owned non-banking finance agency catering to the requirements of the SME sector, is planning to raise Rs 150 crore from the markets through non-SLR (statutory liquidity ratio) debt instruments to fund its portfolio operations this year. | |
| Disclosing this here on Tuesday, A Giridhar, managing director of APSFC, said the corporation would initially float non-SLR bonds worth Rs 50 crore this month. |
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| "As the Reserve Bank of India (RBI) did not give us permission to float SLR bonds (subsidised loans) as per the existing parameters, the corporation has decided to go with the launch of non-SLR bonds guaranteed by the state government," he said. |
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| Though the interest rate for the proposed bonds is to be worked out basing on the market situation, they are expected to carry 1 per cent over the government bonds, around 9.48 per cent, he said. The corporation lends at the rate of 14 per cent interest with a one per cent discount to clients having a good track record. It proposes to bring it down to 12 per cent in the future. |
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| APSFC, which has already entered into co-financing agreements with Hudco and Nabard to extend loans to manufacturing and construction projects, is now entering the debt market on account of overwhelming demand from the SME sector, more particularly from hospitality and construction, engineering and allied sectors. |
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| As against the target of Rs 900 crore sanctions set for the current financial year, the corporation in the first three months alone accorded over Rs 1,200 crore loan sanctions. Of this, Rs 1,063 crore loans related to 312 projects were approved during the special drive conducted across the state during the current month. |
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| It had approved Rs 700 crore loan applications and disbursed over Rs 500 crore in the last financial year. |
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| "The state is witnessing well above the growth rates projected at the all-India level, both in the manufacturing and construction areas," Giridhar said, adding that the corporation's endeavour in the next couple of years was to achieve 30 per cent of the total demand coming from the SME sector. |
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| The State Level Bankers Committee (SLBC) has projected a demand for Rs 14,750 crore in terms of term lending and working capital requirements from the SME sector during the current financial year. |
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| Among the proposals that received approvals for loan sanctions by the corporation, commercial complex projects topped the list with Rs 338.87 crore followed by engineering and allied sectors with approvals worth Rs172.63 crore, while tourism- related projects stood third with Rs 109 crore. The demand from steel and steel re-rolling projects is also on the rise, according to Giridhar. |
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| "We hope to achieve a Rs 50-crore profit after wiping out the entire Rs 20 crore bad debts during the current financial year, as compared with Rs 27 crore last year," he said. |
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