Surat, June 2021: Leading financial institutions engaged in the promotion, financing and development of Micro, Small and Medium Enterprises (MSMEs), Small Industries Development Bank of India (SIDBI) and CRIF High Mark, a leading credit bureau of India, today reported on Launched the third edition of ‘Industry Spotlight’ which analyzes the ‘Indian Textile and Apparel’ industry. As per the report, the total amount of credit availed by this sector as on December 2020 stood at `1.62 lakh crore, showing a year-on-year decline of about 20%. This is due to the suspension of manufacturing activities in March 2020 in the immediate aftermath of the COVID-19 lockdown. The report also stated that as of December 2020, the number of active loans (in volume terms) in this sector stood at 4.26 lakh.
The industry has witnessed a quarterly decline in NPAs (ratio of 90+ days to outstanding loan value) in the last 2 years from 29.59% in September 2018 to 15.98% in September 2020. These NPAs grew by 0.94% in December 2020, which is about 8% lower than the NPAs in December 2019.
There are about 5 lakh borrowers in this sector as of December 2020, with the micro, small and medium segment of the borrowers accounting for 95% of the total credit extended to the sector in terms of volume.
At the state level, the state of Maharashtra holds the largest share of the debt portfolio accounting for 25% of the debt book of the sector. reThe port has highlighted that 13 top sectors rich in textile and apparel manufacturing accounted for 80% of the total credit portfolio of the sector as of December 2020. Almost all states have districts in which textile and apparel manufacturing companies Many loans are active units. The loan portfolio of some districts like Mumbai and Surat as on December 2020 has been more than Rs.10,000 crores.
Sivasubramanian Raman, Chairman and Managing Director, SIDBI, said, “The textile and apparel industry in India is one of the oldest and largest sectors of the Indian economy and an important part of the country’s employment story. The sector is the fifth largest in exports, contributing 12% of the country’s export earnings and 2% of GDP. India is a world leader in textiles and has a complete manufacturing value chain. The Union Budget 2021-22 envisions achieving a $5 trillion economy, keeping in mind the needs of all sectors of the economy and, accordingly, the need for an integrated textile sector and garment parks, to enhance India’s textile competitiveness at the global level. Integrated Scheme (MITRA) was also announced, which will create world class infrastructure with plug and play facilities to reflect the rapid recovery in the domestic market.
Naveen Chandani, Managing Director & CEO, CRIF India said, “Despite the global pandemic, the top thirteen sectors rich in textile and apparel manufacturing were utilizing 75% of the loan portfolio as of December 2020. In India, each state has its own unique contribution in the apparel and textile sector. The Government of India announced a special economic package under the Atmanirbhar Bharat program in May 2020, targeted to benefit a large number of small-scale entities, including weavers and artisans, across the country. The right policy interventions, abundant availability and proper access to raw materials as well as available labor surplus can further boost the growth of this vital sector.”