Lack of financial aid forces Aysha Infotech to drop call centre project

James Paul
28 October 2003

Kochi: A firm in Kerala has been forced to drop its Rs 7 crore call centre project for want of financial aid from banks.

Aysha Infotech Pvt Ltd, of the Koothuparamba-based Aysha Hosiery Factories, had to abandon the 120 seater project, which could have employed 240 persons, after a yearlong wait for bank finance. According to company sources, the reason given by the banks was that this segment of the IT service industry will not flourish in Kerala.

Even venture capitalists in Bangalore rebuffed the request for money on the same ground. (Last year, a Nasscom survey had identified Kerala as one of the best destinations for IT-enabled service industry in the country.)

Sources say they approached six banks for a loan of Rs 3.5 crore for the Rs 7 crore project. But every bank cited the risk factor in financing the project, despite the assurance to give collateral security for the loan. While turning down the plea for loan, one of the banks pointed out the default case of a call centre firm in Andhra Pradesh.

Even as the loan applications were rejected by the banks one after the other, the firm had spent Rs 75 lakh on various accounts. "The training to the candidates by a US professional alone cost Rs 25 lakh for us. Besides, candidates had to reimburse the expenses they incurred for the training. The equipment imported from the US had to be handed over to another firm after paying the demurrage," company sources add.

"When we approached the banks for money they wanted to know whether we have tie-ups with marketing firms. The marketing firms, in turn, wanted to know our infrastructure for doing this business. Without the support from financial institutions how could we build up the infrastructure," laments a promoter of the venture.