Financial Aspect

Canara bank is the lead bank of Coimbatore and SIDBI is the major financial institution. Most of the nationalized bank in Coimbatore have specialized SSI branches. Some of the banks like Oriental bank of commerce, United bank of India, United commercial bank, etc have tie up with NSIC for equipment finance and high value long term working capital support, wherein NSIC recommends these units to the bank.
Banks/FIs are proactive to finance bankable proposals. They also support the sub-sector by financing for common facility centers and common infrastructure up gradation. Each bank depend on its own rating system.

Micro enterprises find it difficult in getting loans from financial institutions/ banks and source loan from private sources at higher interest rate.  They are also not aware govt. schemes such as CGTMSE, CLCSS etc.

The foundry units have acquired land at Foundry Park but due to high relocation cost, i.e. relocation of machinery and equipments, up gradation to machinery for which no financial support is provisioned in the banking scheme the units are hesitant to relocate.

Due to present production cuts because of slowdown and reduced off take from the principal client the MSMEs find it difficult to pay the installments and service the loan. Though banks have adopted certain product lines for financing (Ex: Bank of Baroda provides loan at 1% less than the PLR for wet grinder cluster), there is need to develop cluster specific financial model