‘Lack of funds, technology challenges for small sector’

March 3rd, 2009 - 6:11 pm ICT by IANS  

Lucknow, March 3 (IANS) Despite government efforts to facilitate organised growth of small and medium enterprises (SMEs), the sector continues to face serious constraints such as access to funds, timely financing and technology support, an apex body of management professionals and associations said Tuesday.
“A recent national sample survey has revealed that 92 percent of unorganised enterprises in India do not receive financial assistance from banks or other sources,” said All India Management Association (AIMA) SME committee chairman J.S. Juneja at a workshop here.

Inadequate access to finances, lack of information on sourcing of finances and inefficient finance management are the key challenges SMEs are facing across the country, added Juneja.

According to an estimate, there are nearly 12.8 million SME units in India, with Uttar Pradesh accounting for about 10 percent of this in sectors such as textile printing, footwear and leather products.

Participants at the one-day workshop on “Management skills to source financial aid and management of technology” gave various suggestions for strengthening banker-borrower relationships, including more SSI-focussed bank branches.

Additionally, they said, banks should not insist on collateral security from SMEs and instead, treat cash surplus from operations as the primary security.

Participants also said the National Equity Fund scheme - which provides equity-type support to entrepreneurs for setting up new projects in the tiny and small-scale sector - should be popularised.

AIMA director Kamal Singh said SMEs were the backbone of the Indian economy, adding: “We have found that major constraints faced by SMEs relate to financing, technology and marketing. We will focus on building managerial capacity of SMEs by conducting such workshops across the country.”

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