Silk Testing and Conditioning House

Malda, India

Silk Testing and Conditioning House

Malda, India
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Nagaraj C.R.,Central Silk Technological Research Institute | Naik S.V.,Central Silk Technological Research Institute | Mahesh M.G.,Central Silk Technological Research Institute | Mahesh K.N.,Raw Silk Testing Center | And 3 more authors.
Indian Journal of Sericulture | Year: 2015

Silk reeling sector in India consists of mostly micro enterprises having low fixed capital and inadequate working capital. Credit becomes crucial for augmenting financial needs of the reeling units. Hence this study was proposed to analyse the credit flow to the reeling sector. The study revealed that flow of institutional credit to the reeling sector was very low. It was found that the reeling units do not have adequate working capital at their disposal, which was significantly lower than the requirement. The net profit was found to be significantly higher in units with adequate working capital than in units with inadequate working capital indicating that adequacy of working capital was one of the factors influencing profitability. The analysis of constraints in availing institutional credit revealed that security required for loan was the top ranked constraint followed by procedures involved in loan processing, unfriendly nature of bankers and image of the sector. It was suggested that working capital advances through cash-credit facility, proper assessment of working capital needs, working capital management awareness and interaction meets as measures for increasing flow of institutional credit which would result in increased capacity utilisation and reduce cost of credit procurement, thereby increase profitability of units.

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