Sidbi To Launch Factoring Services For Ssi Sector
The Small-scale Industries Development Bank of India (Sidbi) plans to launch factoring services that will help in mopping up the industries dues from the buyers.
Sidbi managing director Sailendra Narain said here yesterday Initially, the factoring services would be started from four or five centres in India and, gradually, after getting the experience, the activity would be enlarged.
Under the factoring services, the service providers maintain entire account of sellers and collect payments on behalf of them from various buyers, thus, ensuring recovery of the dues and management of bad debts in time.
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At present, factoring services are being provided by the State Bank of India (SBI) and Canara Bank, where Sidbi has participated as equity partner, Narain said.
Some private sector companies like Delhi-based Foremost Factors Ltd are providing factoring services to their customers.
These services range from collecting dues on behalf of the sellers to providing details about the credit worthiness of the buyers.
The Sidbi managing director said some private factoring companies are coming up with the help of the bank.
Factoring services would give Sidbi a bigger avenue in increasing assistance to the small-scale industry, he said.
The services provided by the bank would help sellers in enlarging their selling capacity to a large number of purchasers and it would maintain entire account of the seller, Narain said.
The onus of paying dues to us would be on purchaser, but in case of any default, the seller would not suffer as Sidbi will ensure recovery of the payments, he said.
Referring to the branch expansion scheme undertaken by the bank, Narain said Our approach of branch expansion is not in opening a branch in all big cities. We will concentrate in the clusters where SSIs are strong.
The Nayak committee on SSI has identified 85 such clusters and the bank wants to expand its activities in all these areas, he said.
But this does not mean Sidbi will open offices in all the clusters, said Narain.
Last year, Sidbi opened five branches, taking the total strength to 39.