The Tiruppur Exporters’ Association (TEA) has requested Finance Minister Nirmala Sitharaman to permit repayment of funded interest term loans (FITLs) in six equal monthly installments to boost revival of micro, small and medium enterprises (MSMEs) in the knitwear cluster, which has not recovered due to less exports and reemergence of COVID-19 in major European markets.
TEA President Raja M Shanmugham said increasing cotton yarn prices and irregular supply of yarn for the past four months has badly affected the knitwear sector, particularly MSMEs, which are struggling to sustain and exporting units are finding it difficult to repay the FITLs.
The Reserve Bank of India (RBI) had decided to permit lending institutions to convert the accumulated interest on working capital facilities over the total deferment period of 6 months (i.e. from March 1 to August 31, 2020) into a FITL, which shall be fully repaid during the course of the last fiscal, ending March 31.
Another requisition has also been made to Sitharaman to advise RBI to permit extension of the Interest Equalisation Scheme for another three years, which will help MSME exporting units to work out their costing accordingly and strive to take more export orders and sustain in the business.