It is a ‘diagnostic’ and ‘curative’ organizational innovation initiative by the Telangana government for the exclusive benefit of micro and small enterprises in the manufacturing sector. The aim is to resolve the issue of stressed assets of these MSEs, as it was found that all attempts at revival thus far by both the RBI following various committees’ recommendations from time to time and government of India did not bear fruit.
This initiative is Telangana Industrial Health Clinic (TIHCL), which is a fintech-driven NBFC, registered by the RBI and funded by the government of Telangana (to the extent of 10% of the initial corpus of Rs1 billion), MSEs availing services from it (5% of the corpus), industry associations, strategic partners, banks and financial institutions and HNIs (to the extent of the balance of the initial corpus). MSE who avail of the services of TIHCL must invest 1% of the funded loan with a minimum of Rs10,000 and maximum of Rs200,000
“We noticed that the manufacturing MSEs operate only in debt markets and are often starved of affordable consulting and credit at the right time and in appropriate doses to scale up the operations,” says Dr B. Yerram Raju, former career banker, economist and risk management specialist, who is an advisor to the Telangana government and one of prime movers behind TIHCL.
Raju tells Banking Frontiers that TIHCL is more a facilitating than funding platform. It facilitates the ailing manufacturing MSEs with diagnosing their real problems that may have crystallized into deficiency in capital.