KOCHI: The Union budget proposes to reduce the guarantee fee and the annual fee of the Credit Guarantee Fund Trust for Small Industries (CGTSI) operated by Small Industries Development Bank of India (SIDBI). The bank will reduce the guarantee fee from 1.5 per cent to 1 per cent and the annual service fee from 0.75 per cent to 0.5 per cent for loans up to Rs.5 lakh.
This will be of significant help to small and medium coir enterprises from which weavers will seek term-loans under the Coir Board’s Rejuvenation, Modernisation and Technology Upgradation Fund Scheme.
As on January 31, 2008, the credit guarantee trust with SIDBI had extended guarantees to 89,129 units for a sum of Rs.2,479 crore, said a communication from the Coir Board here.
Those seeking term-loans under the Coir Board’s Rejuvenation, Modernisation and Technology Upgradation Fund Scheme have to meet the cost of guarantee and annual fee of the trust fund. The guarantee fee will now be reduced to Rs,1,650 as against the present Rs.3,850 per beneficiary for small and medium enterprises. For tiny/household units, the payment will be Rs.4,125 as against Rs.9,625.
The annual fee payable will be Rs.550 for the spinners and Rs.1,375 for the weavers, considerably reducing the cost of the term loans under the trust fund. Coir Board Chairman A.C. Jose says this will be of great help to the tiny and small coir unit owners.