by Rajen KumarIndia's Manufacturing Muddle
What holds Indias manufacturing sector at the back foot? Why the sector has failed to emerge from the shadow of a strong service sector which has recorded a creditable growth in the...
Special ReportsMar 2014
When you have just decided to go ahead and chase your dream of higher studies, the one you had sidelined for quite some time now, you realize the road ahead is not so...
We Have Enough Room to Grow: DBS Bank
Four times in a row, Singapore based DBS Bank was named Safest Bank in Asia by Global Finance last year. With over 250 branches across 15 markets, DBS Bank has a growing presence in the three key Asian axes of growth Greater China, Southeast Asia and South Asia.
How Small Manufacturing Businesses can Generate Funding for Expansion of their Ventures?
The Micro Small and Medium Enterprise MSME sector in India is essential to achieving the targeted growth rate of our nation. This sector nurtures budding entrepreneurs and incubates innovation at its most rudimentary level. A growth in the MSME sector ensures industrialization in backward areas. In the last five year plan, this sector demonstrated an average growth of 12 percent, raising the share of the manufacturing sector in GDP to 16 percent.
A New Concept in SME Financing
Globally, innovative models are being explored to provide better funding alternatives to SMEs one of them is Impact Investment. These investments are made into SME companies, organizations, funds with the purpose to produce quantifiable social and environmental impact alongside a financial return. The impact investors here target a range of returns from well below the market up to market rate, depending upon the business model of the issuer. There are certain bodies and associations working for effective impact investing by building critical infrastructure and developing activities, education, and research that attract more investment capital to poverty alleviation and environmental solutions.
Spotlight on MSME Finance
Finance, needless to mention, is the blood of every business, whether Micro, Small or Medium or otherwise. Bible, Ecclesiastes 10 19 says, A feast is made for laughter, and wine maketh merry but money answereth all things! Another amous saying is of W. Somerset Maugham from Of Human Bondage, Money is like sixth sense without which you cannot make a complete use of other five. How true for the MSMEs also! Many studies, reports, findings are available on Finance to MSMEs. The Report, MSME Finance in India of International Finance Corporation, [IFC] distinguishes itself from the other resembling reports not only by its contents but also on the analysis and apt way forward.
CGTMSE SCHEME -A WIN-WIN SITUATION
Micro, Small and Medium Enterprises constitute the backbone of the Indian economy. The 26 million MSEs in India contribute roughly 10% to the GDP, employ more than 60 million people and contribute almost 45% of the total manufacturing output and 40% of the total exports.
Credit Ratings Help SMEs to Access Capital
Prevailing information asymmetry within the MSMS sector impedes supply of adequate quantum of finance. The banking and financial service institutions are unable to take decisions due to lack of structured and analyzed information on the MSMEs. In such a scenario, credit rating for the MSMEs provides to be beneficial in building confidence of the formal channels of lending on the MSMEs.
Recent Trends in Credit Rating; Corporate Governance
An SMEs desire to obtain a credit rating is often motivated by its need for getting Bank finance at a subsidized rate / issuing debt-related instruments in capital market. However, information asymmetry problem is one of the major obstacles to the unitís endeavor. To reduce the information asymmetry problem, the unit has to seek a credit rating from an independent credit rating agency.
Present State of our Economy The markets are in jittery, and for valid reasons. The rupee has hit an all-time low of Rs. 53 and macroeconomic indicators of the economy are sagging. Industrial production is on a downward spiral. Policymaking is ground to an apparent halt, and the rollback of the decision to open up multi-brand retail has sapped investor confidence. The negative growth registered in industrial production in October, a sharp 5.1% decline, and shows that industrial productivity is slowing far more rapidly than expected.
SME Enterprises: A Road Map to Fulfill an Under Delivered Promise!
The contribution of SME to the Indian economy is over 10% of the GDP. It accounts for nearly 35% of the manufacturing and 40% of the exports. The role of the SME in the employment generation can hardly be discounted. The SME sector is truly representative of the spirit of the Indian entrepreneurship. It is all about frugality in the business and survival of against all odds. It is based on native intelligence and being extremely street smart.
- Winner of appreciation award for promoting SMEs in India.
- 1st ever Indian magazine to penetrate tier II, III cities & the rural belt.
- Industry Partnerships include CII, FICCI, ASSOCHAM, PHDCC, AIMA, ITPO, SME Network, Federation of Indian Micro Small Enterprises (FISME)
- Official Magazine Partners for several national & international MSME events.
The Last Word
January every year used to be the Great Film Month in Delhi. International Film Festival of India, IFFI used to take place a great get together of film buffs. Youngsters with a taste for the...
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