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SMEs have limited access to capital, HR and technology
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SMEs have limited access to capital, HR and technology
The global reces sion is affecting Indian industry as never before despite protestations to the contrary.
Caught in the cross-fire is the Indian small-scale industry. Says Mr B.V. Rama Rao, president, The Federation of Andhra Pradesh Industries (FAPI), “In Andhra Pradesh, small and medium enterprises are becoming sick and they will end up being non-performing assets (NPAs) with banks. The industry is in a state of crisis,” said Mr A. Jayan, managing director, Narmada Engg. Co.
Pvt. Ltd. The lack of working capital is squeezing many of the small-scale industries.
Mr Jayan mentioned that not only small scale industries but even largescale industries are getting hit.
He stated that even leading auto components manufacturer, the Rs 1200crore Bharat Forge, the country’s largest exporter of auto components Bharat Forge has allegedly shut down its Pune plant, butressing his point of view. The problem, however, is that the SMEs are not able to raise capital from a separate stock exchange.
Currently, the cost of raising resources for SMEs through stock exchanges is exorbitant — so SEBI has had to work out a separate model for small businesses which it is doing shortly.
The secretary-general of Ficci, Amit Mitra has said earlier, “SMEs have limited access to capital, human resources and technology. Steps need to be taken to ensure greater credit flow through cluster-based financing for the fund-starved sector, setting of an SME information exchange, which will act as a one-stop source for SME-related information, provision of basic physical and economic infrastructure, nurturing of human resour-ces potential by enhancing their productivity.” Meanwhile, Mr Rao says, “The Micro Small Medium Enterprises are not getting adequate finance from commercial banks. In addition, they are insistiting on heavy collateral securities.” FAPI stresses that RBI should issue orders to all nationalised banks “to give one-year moratorium to SMEs”.
Source:
http://www.dc-epaper.com/DC/DCH/2008/11/29/index.shtml?ArtId=016_007&Search=Y
Caught in the cross-fire is the Indian small-scale industry. Says Mr B.V. Rama Rao, president, The Federation of Andhra Pradesh Industries (FAPI), “In Andhra Pradesh, small and medium enterprises are becoming sick and they will end up being non-performing assets (NPAs) with banks. The industry is in a state of crisis,” said Mr A. Jayan, managing director, Narmada Engg. Co.
Pvt. Ltd. The lack of working capital is squeezing many of the small-scale industries.
Mr Jayan mentioned that not only small scale industries but even largescale industries are getting hit.
He stated that even leading auto components manufacturer, the Rs 1200crore Bharat Forge, the country’s largest exporter of auto components Bharat Forge has allegedly shut down its Pune plant, butressing his point of view. The problem, however, is that the SMEs are not able to raise capital from a separate stock exchange.
Currently, the cost of raising resources for SMEs through stock exchanges is exorbitant — so SEBI has had to work out a separate model for small businesses which it is doing shortly.
The secretary-general of Ficci, Amit Mitra has said earlier, “SMEs have limited access to capital, human resources and technology. Steps need to be taken to ensure greater credit flow through cluster-based financing for the fund-starved sector, setting of an SME information exchange, which will act as a one-stop source for SME-related information, provision of basic physical and economic infrastructure, nurturing of human resour-ces potential by enhancing their productivity.” Meanwhile, Mr Rao says, “The Micro Small Medium Enterprises are not getting adequate finance from commercial banks. In addition, they are insistiting on heavy collateral securities.” FAPI stresses that RBI should issue orders to all nationalised banks “to give one-year moratorium to SMEs”.
Source:
http://www.dc-epaper.com/DC/DCH/2008/11/29/index.shtml?ArtId=016_007&Search=Y
