Not many takers for OSFC loans

Damonexon

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posted on 13 years ago — updated on 1 second ago

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CUTTACK: The Orissa State Financial Corporation (OSFC) has set a loan sanction target of Rs 50 crore for 201112 fiscal even as it..

CUTTACK: The Orissa State Financial Corporation (OSFC) has set a loan sanction target of Rs 50 crore for 201112 fiscal even as it is faced with a drought of customers.The Staterun financial institution, which resumed its lending business after six years in 201011, did not find many takers among industry and business enterprises. The Corporation could only sanction Rs 3.94 crore to about six units adding marginally to the cumulative sanction since its inception of Rs 1,310.20 crore.
The lack of enthusiasm among the customers has been attributed to the halt in lending operations for such a long period. Most of the good customers have migrated to banks and other financial institutions. The loan policy for 201011 also contributed as it laid emphasis on financing only standard units, Industries Secretary and OSFC Chairman T Ramachandru observed while chairing the 54th Annual General meeting here. The Corporation has managed to disburse only Rs 0.71 crore to three units but recovery has made a positive leap accounting for Rs 42.03 crore against Rs 40 crore in the preceding 200910. This year a target of recovering Rs 40 crore has been fixed along with disbursal of Rs 30 crore.

The Chairman also stated that following revamp and restructuring initiatives, the Corporation has earned profit over the last six years. The dip in net profit of Rs 0.61 crore in 201011 against Rs 1.80 crore in the previous year was on account of lower interest income and higher personnel expenses.

For drawing customers and streamlining its operations, it has entered into a tieup with Union Bank of India for facilitating sanction of working capital and also initiated process of joint financing with SIDBI for risksharing. It has also adopted the credit appraisal and rating tools (CART) software of SIDBI for risk rating of credit proposals up to Rs 1 crore.