Tamil Nadu Industrial Investment Corporation, popularly known as "TIIC", is one of the prime lenders for Micro Small and Medium Enterprises in Tamil Nadu.
Established in the year 1949 under the Companies Act, 1913, TIIC currently operates with a total paid up capital of Rs. 37,600 Lakhs and total advance exposure of Rs. 1,09,741 Lakhs, as per the audited financials for the year ended 31.03.2019.
TIIC has been a pivotal lender for the manufacturers in Tamil Nadu and are undeniably the underdogs of the industry. Being a state-run corporation, one of the main advantages of TIIC when compared to other banks, is the amount of subsidy.
The fact that TIIC is a state-run corporation has been the source of a common mis-conception that the process of loan sanctioning might be very complicated. Contrary to this, the reality remains, that the entire process is hassle-free and unencumbered. Like most of its contemporaries, with proper documents and collateral security, the loan sanctioning is facilitated in time.
In the article let us look us the type of schemes available in TIIC.
Following are the types of schemes available,
Let us go through the schemes one by one.
Term Loan
Term loans are generally sanctioned for purchase of equipment and to existing customer with immediate requirements. Term loans can be further classified into the following :
General Scheme
Micro and Small Entrepreneur Funding Scheme
Equipment Finance Scheme (EFS)
Fast Track - EFS
Privileged Customer Scheme (PCS)
Medical Practitioner Scheme
Thulir Scheme
Throwing light on a common confusion, this scheme does not extend a Working Capital Loan as such, but facilitates the lending of Working Capital Term Loan. These loans are generally given to existing units which are in operation for minimum period of 2 years. Maximum amount of loan that will be sanctioned under this scheme is Rs. 2.00 Crore. Working Capital Term Loan can be further classified into the following :
Flexi Working Capital Term Loan &
Working Capital Term Loan
Going by the name of the Scheme, these loans are mainly for the Contract Workers of Tamil Nadu Water Supply and Drainage Board and Tamil Nadu Electricity board.
"NEEDS" is an abbreviation for New Entrepreneur cum Enterprise Development Scheme. This scheme basically focuses on Development of new Entrepreneurs. With an objective to create opportunities for such growing entrants in the field of entrepreneurship, the framework of the scheme is as follows: Promoter's Contribution is 10% for General Category and 5 % for Special Category.
This scheme is to encourage entrepreneurs for setting up of private units for captive consumptions of renewable energy. It is available for new units as well as existing units in operation for period of 3 years. Promoters contribution for new units is 35% and for existing units is 25%.
EDS Scheme(ENTREPRENEUR DEVELOPMENT SCHEME)
This scheme mainly focuses on encouraging entrepreneurship amongst persons from economically and socially disadvantaged backgrounds who aim at promoting their own enterprise. Promotors contribution for this scheme is 10%.
PROCESS
Borrowers interested in availing loan from TIIC must visit the branch for preliminary enquiry. Coimbatore houses two branches:
The Regional Office in Dr. Nanjappa Road and
Another branch, situated in Kurichi.
Accordingly, visit the branch that covers the scope of operation in the location of your manufacturing units.
After the preliminary discussion, if the branch is satisfied with your proposal, they will facilitate further processing with necessary documents required.
Once your proposal has been taken up by the bank, the initial requisite onwards, is obtaining Legal Opinion for your collateral security from an Advocate and Bankers' Opinion from the bank which houses your regular financial operations.
If Clear Title is given by the Advocate in the Legal Opinion, the collateral security will then be valued by the Panel Valuer.
On finding the said collateral value competent and adequate, then branch will move ahead with the next process.
Once collateral is valued, a pre-sanction visit will be undertaken by the branch to ensure the authenticity of the manufacturing unit's location.
Such pre sanction visit will be followed by a visit to the Borrowers' Residence and a consequent Business Intelligence Report will be furnished.
On satisfactory progress of the afore mentioned process, the branch will submit loan proposal before Branch Sanction Committee.
If the Branch Sanction Committee is satisfied with the proposal then, it will issue the terms & conditions requiring adherence. If the borrower agrees to such terms and condition, the loan will be sanctioned.
At any time during the above stated process, if any such requirement arises therein, the Branch may call for any additional documents which were not collected during the preliminary discussion.
Article originally published in the March 2021 Newsletter of The Coimbatore Branch of SIRC of The Institute of Chartered Accountants of India.
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