Creditworthiness improves in Mumbai

Resellers in Mumbai are slowly extending the credit period at

the second and third-tier level, indicating an improvement in the

creditworthiness among channel partners. Feedback from the market is that credit

is being extended even up to 30 days in many deals.

"There is no doubt about the improving creditworthiness,

but it is happening only at the tier-two and three levels," says Pravin

Dhoka of Ortek Computers.

Creditworthiness of partners became very low after a series

of bankruptcy cases were reported last year. During this period, trade bodies,

and almost all big distributors had taken an unanimous decision to strictly

reduce the credit-period to 14-days and transact against post-dated cheques

only.

While confidence among partners has improved at the second

and third-tier, at the distributor level, the policy is still to give only

14-days credit but with greater flexibility.

Says Sunil Jain of SK Impex, "We get extended credits

from distributors for up to 21 days if the deal is of above Rs 2 lakh."

Few more resellers have reported that they get extension from

distributors on a deal-to-deal basis. "It also depends on the relationship

with the distributor," adds Sunil.

NELSON JOHNY