Working Capital Support to Microenterprises

A Revolving Fund (RF) is provided as working capital support for existing enterprises. The working capital support from the revolving fund is given to the activity groups without charging interest. The loans extended from the existing revolving fund have already emerged as an important source of working capital funds for the groups. Groups that had gone down in performance due to problems in working capital management have benefited from this the opportunity. Groups have already started repayment and are fast realising the advantages of having access to such a fund.

At present, an amount of Rs10,000 each is being provided to the activity groups as working capital revolving fund. The groups are selected on the basis of their performance. The repayment status of RF has proved to be exemplary with hardly any default.

The revolving fund is administered through the Theeramythri Management Councils. With the repayment already happening, the current systems and processes could be reviewed at the end of completion of one cycle. If necessary, the systems and processes would have to be reviewed for enhanced effectiveness and efficiency.

In the next phase, more groups would be requiring working capital loans. Some of the groups that had not been able to avail the first tranche of loans are now gearing up towards qualifying for the working capital support. The access to the fund is limited to the groups that perform well in timely repayment. The loan amount would also be enhanced for such groups to Rs. 25,000 per group.