Payment crisis hits Baroda resellers

The IT reseller market in Baroda had recorded a phenomenal growth of about 40 percent over the last two quarters. However, this growth is getting heavily understated with payment crisis hitting the resellers hard in this city. 

Market sources reveal that during the past six months there was a spurt in demand of PCs and peripherals because of some major data-entry projects being launched in the city. Many individuals and organizations invested towards buying systems in order to take up a share of this project. 

However, as the situation stands today, these projects have not taken off leading to payment delays and non-payments to resellers.

Informing about the situation, Paritosh Mehta, President, Baroda Information Technology Association (BITA), said, "Nearly Rs 1 crore in payments have got stuck and several resellers have got affected because of this. So while in the last two quarters, resellers were jubilant making good sales to those who were taking up these projects, they now are finding it difficult to recover the money." 

According to Mehta, resellers should have properly assessed the repaying capability of buyers.

"Lot of IT education organizations diversified into digitization projects since demand for IT training had gone down considerably. And they made purchases without even verifying how genuine and feasible the job offers were," elaborated Dinesh Patel of Disu Systems.

"Nearly Rs 6 lakh to Rs 8 lakh of our organization is stuck due to non-payments. In fact, we recalled around 50 machines when some of our clients could not pay up the money," said Harshad Patel of Sri Harsh Systems. According to Patel, few companies posing to have data-entry projects with good remuneration lured many individuals and organizations towards making some initial investment.

Dinesh also adds that the payment problems are also arising from the corporate sector where credit period exceeds thirty days. "We get credit of maximum 21 days while the corporate wont pay us before 35 days-40 days. Sometimes, they even exceed this period. This creates a great problem in cash flow," added Patel.

Cyber News Service