Micro Small and Medium Enterprise - Problems and Prospects in India

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INNOVATIVE PRACTICES & STRATEGIES
IN
GLOBAL BUSINESS AND ENTERPRISES
By
Dr.K.Maran
Professor & Director
Sri Sai Ram Institute of Management Studies
Sai Ram Engineering College, Chennai

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SMEs
 Small and medium enterprises are classified in India
based on their investment levels.
 SME sector known as Indian Economic Engine
 It provides vast employee Opportunity
 Low Capital Cost
 Industrialization in backward region

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MSME
Types of Enterprise Investment Turnover
Micro Rs 1 Crore Rs 5 Crore
Small Rs 10 Crore Rs 50 Crore
Medium Rs 50 Crore Rs 250 Crore

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SMEs
 Hundred And Ten Million employees working in
SME
 Number of SME 42.5 Million units in India
 More than 6,000 products

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Cont..
 45% of Total production in country
 40% of Total Export from the country
 SME contribute to 30% of GDP

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PROBLEM IN SMEs
 Slow down the economy
 High cost of capital
 Esteem low budget for Research and Innovation
 Lack of quality Man Power

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Cont..
 Rising cost of Raw material
 Rising Cost of Man Power
 Increasing Market Expenses
 Tough competition

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Cont..
 Lack of adequate and timely access to finance
 Investment in manufacturing sector
 Lack of access new Technology
 Lack of acquiring new skills

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Cont..
 Lack of marketing support
 Branding and Package
 GST
 Demonization
 MNCs

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Prospects of SMEs
1.Funding Opportunities
Bank loans
Foreign bank loans

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Prospects of SMEs
Cont..
Venture capital
NBFC
(Non-Banking Financial corporation)
Digital lenders

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Prospects of SMEs
2. Types of SME Loans
Term Loans
Project Finance

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Prospects of SMEs
Cont..
Equipment Finance
Working Capital Loans
Cash Credit Facilities
Invoice Discounting

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Prospects of SMEs
3. Role of the Government in the Growth of SMEs
 Credit Guarantee Fund Scheme
i.This scheme is eligible for existing and new enterprises.
ii.SIDBI offers working capital loans of up to Rs. 1 crore

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Prospects of SMEs
Cont..
 Credit Linked Capital Subsidy Scheme for Technology Up
gradation (CLCSS)
i.This scheme created by the MSSI (Ministry of Small Scale Industries).
ii.Capital subsidy of 15% up to a maximum of Rs. 15 lakhs for
machinery and plant modernization.

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Prospects of SMEs
Cont..
 Pradhan Mantri MUDRA Yojana (PMMY)
i.PMY offers credit to SMEs from the non-agricultural sector.
ii.Business owners can avail credits under three different
schemes – Sishu, Kishore and Tarun

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Prospects of SMEs
Cont..
 Financial Assistance for International Trade Fairs,
Exhibitions
i. SMEs can avail reimbursement of up to 75% on the one-time
registration fee and annual fees.

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Prospects of SMEs
4. Role of Technology in the Growth of SMEs
 Mobile payments
 FinTech
 Cloud Computing
 Big Data
 AI and machine learning tools

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Prospects of SMEs
5. Rising per Capita Income
6.Increasing purchase power
7.Fullfill the need of middle level and low level Economy
people

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Conclusion
 SMEs play a vital role for overall socio& economic
development only.
 This is not only for India even developed and
undeveloped countries

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