Srinivasan, Zonal Head, Federal Bank; Raghuttama Rao, MD, ICRA Management; Lokeshwarri SK, Head- Research Bureau, Business Line ; A N Jha, GM, SBI; K Krishna Kumar, MD, Leitwind Shriram Manufacturing Ltd; and N Madan, Partner-Tax, Pw C, at Propel, an SME conclave in Chennai, on Friday



Chennai, December 16:  

Small- and medium-scale enterprises, which account for significant employment generation in the country, should find their niche and be competitive to scale up their business and find better access to funding, say experts.

Speaking at an SME conclave organised by the State Bank of India and BusinessLine in partnership with Madras Chamber of Commerce and Industry, Raghuttama Rao, Managing Director, ICRA Management, said: “SMEs, especially the ones in the manufacturing sector in India, have huge opportunity for growth in the country.

“But most of them do not scale-up, and address only a smaller section.”

Of the 30 million SMEs in India, only 94 per cent are registered. These provide employment opportunity to 70 million people, either directly or indirectly.

SMEs account for 45 per cent of total industry output and 40 per cent of total exports. Yet, there is not enough data available on these enterprises.

According to Rao, this has created a huge gap in access to credit, making funding a challenge. “Only 10 per cent of SMEs have access to the ₹80 lakh-crore credits available,” he added.

Another issue is that most the industries do not equip themselves to scale up, and are not competitive enough. AN Jha, General Manager, State Bank of India, said: “Even as companies scale up, they should remain competitive and be equipped to face challenges. If they do that, funding from banks will automatically follow,” Jha said.

Srinivasan, Zonal Head, Federal Bank, said lack of collateral security and poor financials also affect an enterprise’s ability to access banking and funding. “Companies should take advantage of the many subsidy schemes, introduced by the Centre and State governments, to the fullest,” he said.

Raghavan Srinivasan, Editor, BusinessLine, said conclaves, such as this, focussed on the MSME sector, will help SMEs equip themselves. Series of such conclaves are planned across various places to discuss challenges in policy, taxation and finance, to help entrepreneurs take better decisions, he added.

(This article was published on December 16, 2016)