The Telangana Industrial Health Clinic Ltd (TIHCL), a one-of-its-kind initiative of the State government to handhold micro and small manufacturing enterprises from slipping into sickness, is ready to extend services beyond the boundaries of Telangana on demand.
Since its inception about one and a half year ago as a fintech non-banking finance company, the TIHCL has been managing with just one-tenth of the originally envisaged ₹100 crore corpus fund. This decision makes it eligible for Central government funding.
At the recent board meeting, it was resolved to go pan India, said Advisor B. Yerram Raju, explaining that the Union Ministry of MSME had set this pre-condition to fund.
The proposed foray, however, would be subject to the State government giving an assurance of no intrusion either in the model of funding, offered to the micro and small enterprises, or governance. Another condition is that the Centre or the State government concerned ought to take care of the administrative, legal and consulting expenses.
Stating that he expected Central funding anywhere between ₹10 crore and ₹25 crore, the economist and former banker said a grant support of ₹10 crore that NITI Aayog extended to innovative institution was likely to come.
Social equity
Apart from accessing Central funds, the TIHCL intends to tap into social equity investors. Up to ₹25 crore is what it eyes in next financial year from such investors.
For now, the ₹10 crore corpus available is the contribution the State government made. A sum of ₹50 crore supposed to come from the State Reorganisation Devolution Funds of the Centre was unlikely to fructify, he added.
For the TIHCL that has put in place robust processes, systems and a portfolio of products through a small team of its own and in partnership with a few other entities, additional funds would help scale up operations. In a rather short span, it had successfully helped 40 units emerge stronger and was in the process of doing the same to 13 more. Another 35 cases had the potential to be revived.
Thus far, it received a total of 181 cases, of which it found little potential in respect of 71, while 10 were found to be unviable and 12 dismissed as they were found to be wilful defaulters.
The TIHCL helps units revive through a combination of strategies, including handholding, mentoring, counselling, revival and restructuring.
In terms of its investment, it is up to ₹25 lakh per unit. Its portfolio of products comprises bridge loan, stressed assets finance, credit financing and margin amount funding. For women entrepreneurs, it offers these at a concessional rate of interest under NARI scheme. It also provides composite loans with flexible repayments and withdrawals to new micro and small enterprises established by women.
Going forward, a rating service for the enterprises and helping them go public figure in the plans of TIHCL.
