New Delhi, Dec 26 (KNN) An analysis of over 200 Micro, Small and Medium Enterprises (MSMEs) by CRISIL reveals that there is a positive trend of working capital requirement of MSMEs in the auto component sector as the sector is registering new orders from original equipment manufacturers (OEMs).

The study further revealed a healthy growth in vehicle segments since OEM accounts for 65 per cent of the auto component sector demand.

The study observed that the MSMEs worry over capital due to the limited source of finance with reasonable rates available to them.

Commenting over the findings, T Raj Sekhar, Director, SME ratings, CRISIL in a press interview informed that with new signs, there is a fair opportunity for the banks to re-enter the MSME lending after a bumpy two year ride.

The obligation to maintain high inventory because of diversified customer and product base, increase in commodity prices and advent of GST policies are some of the various reasons behind the rise in working capital cycle, the study noted.

CRISIL’s SME Ratings is a healthy tool to forecast performance and assist in assessing financial business and management risk metrics. Lenders can extract benefits by altering their informal credit decisions with the help of CRISIL’s SME Ratings. It can also be used as self-improvement tool and in comparisons with the peers’ enterprises. (KNN/MG)