UP govt to float asset-based lending arm to ease working capital for SMBs

Will set up JV between two state-owned entities, push for developing industrial enclaves spanning 5-50 acres under PPP model

The Uttar Pradesh government is planning to float an asset-based lending (ABL) arm to provide cheap finances to enterprises, amid the working capital crunch being faced by small and medium businesses in the covid-19 pandemic.

The state will set up a joint venture (JV) between UP Industrial Consultants Limited (UPICO) and UP Laghu Udyog Nigam Limited. The new lending entity, to be supported by the National Small Industries Corporation (NSIC), will offer loans at attractive rates to the small and medium enterprises.

ABL or asset-based financing is the business of offering credit, which is secured by collateral by way of inventory, receivables,