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Section C: Textile Industry

Sources of funds

According to the survey results, majority of the respondents in the textile industry prefer to arrange for their financing needs through bank term loans and internal accruals or through their own sources of finance. In the past none of companies raised funds from Venture Capitalists/Private Equity but a few had plans to raise funds through these channels

Deployment of funds

As per the survey, working capital requirement emerged as the most prominent financing need of the respondents in the cluster in the last three years. For the coming three years, working capital requirement will continue to be the most prominent financing requirement for the respondent companies in the future.

Procurement of funds

Out of the total companies that were surveyed in the textile industry, around 43% of the companies found procurement of funds relatively easy. Around 40% of the remaining companies faced moderate difficulties in the getting funds.

Credit obstacles

The major credit obstacle faced by respondent companies in the Mumbai cluster, according to the survey was the high interest rates charged by banks and financial institutions. Other credit obstacles as per the results of the survey include, the credit ratings requirements and the perception of high credit risks by banks & financial institutions while lending funds to the SMEs.