SMEs vie for APSFC funds

Following a special campaign on funding and incentive facilities for small and medium enterprises (SMEs) in the state, the Andhra Pradesh State Financial Corporation (APSFC) is getting a good response from entrepreneurs.

According to Ajeya Kallam, managing director of APSFC, the corporation has so far received double the number of proposals for a total lending requirement of Rs 185 crore as compared with about Rs 85 crore during the first phase campaign last year.

Of these proposals, the demand for investment credit from food and agro processing, electrical, engineering, plastics and construction of commercial complexes range between Rs 20 crore and Rs 46 crore, a broader indication of the substantial activity taking place in these areas under the SME sector in the state. Proposals for funding of hospitals (Rs 8 crore), hotels (Rs 11 crore) and IT companies (Rs 9.75 crore) are next in the line, according to the information provided by APSFC.

Speaking at an 'enterprise development programme', covering entrepreneurs belonging to Hyderabad, Ranga Reddy and Medak districts here on Wednesday, Kallam said the corporation had fared fairly better during the last couple of years despite stiff competition from commercial banks with access to cheaper funds.

Speedier processing of loan proposals compared to regular banks has been one of the important contributors to the growing business of the SFC, according to him.

Addressing the entrepreneurs, who turned up unusually in large numbers, J Rambabu, chairman of APSFC, said the corporation was more interested in the growth of enterprise than the rate of interest being charged for funding. "The corporation is aiming at more than 50 per cent market share in the SME sector."

The corporation has drawn up plans to sanction Rs 675 crore loans during the current financial year compared with Rs 586 crore last year. Similarly, it has also proposed to increase the loan disbursements to Rs 422 crore this year as against Rs 349 crore last year.

The corporation is hoping to reduce the net NPA to below 6 per cent level in the next five years from the last year's 16 per cent.

APSFC is also planning to provide loan assistance beyond Rs 20 crore to units on a selective basis in consortium with public sector entities like Bank of India, State Bank of Hyderabad, and Small Industries Development Bank of India (Sidbi) with whom it has signed MoUs for joint funding.

Products for aviation and defence sector, spice powders, oil extraction from aromatic plants, fruit and food processing, IT/BT, apparels, sanitaryware, quartz, granite tiles, RCC spun pipes, robo sand, pharmaceutical formulations, bulk drugs, and heavy and precision engineering are among the important investment opportunities enlisted by APSFC in Hyderabad, Ranga Reddy and Medak districts.