The beneficiary MSMEs comprised nearly 435,000 existing and 540,000 new units across different segments
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, equipment or other property owned by the borrower.
“We are working with the NSIC for the proposed asset based lending entity. A concept paper is being prepared in this regard,” UP additional chief secretary, micro, small and medium enterprises (MSME) and export promotion, Navneet Sehgal told Business Standard here today.
The Board of the UP Laghu Udyog Nigam Limited has also cleared the proposal of setting up the ABL arm for the benefit of the MSME sector, he informed.
Further, the government has decided to push for developing industrial enclaves spanning 5-50 acres under the public private partnership (PPP) model to boost the local economy across UP.
Following lockdown, which had brought the state’s MSME sector to a virtual standstill barring those engaged in producing and supplying essential commodities viz. food, medicines etc, the government has been taking measures to facilitate speedy revival of the economic activities. During the lockdown period, the Adityanath dispensation has facilitated working capital
credit of more than Rs 26,000 crore to about a million MSME units, he said.
The beneficiary MSMEs
comprised nearly 435,000 existing and 540,000 new units across different segments, which were provided bank financing totalling Rs 10,727 crore and Rs 15,246 crore respectively under various central and state government schemes.
Meanwhile, the Nigam’s Board also approved the proposal of setting up of flatted or vertical factory complexes in four districts at an investment of Rs 345 crore. The flatted factory concept is about an industrial building of more than one storey. The complex is subdivided into separately occupied units used for manufacturing, assembly and associated storage functions.
The flatted factory complexes will be set up in four districts viz. Gorakhpur, Ghaziabad, Agra and Lucknow for non-polluting industrial units. It is expected to overcome the scarcity of industrial space for new industries and to promote startups.
The blueprint for the Agra flatted factory complex has already been prepared. It will entail investment of Rs 185 crore and accommodate 245 units. The government is keen to promote the flatted factory concept after chief minister Yogi Adityanath had instructed officials to take urgent steps to accelerate industrialisation by providing fresh land/space for new industries.