Funds availability key hurdle for SME sector

Published: 13th August 2012 09:15 AM  |   Last Updated: 14th August 2012 11:51 AM   |  A+A-

Availability of funds, technological upgrade for plant, machinery and skills improvement and on time payment of dues to the small and medium enterprise (SME) continue to be the biggest challenges faced by by the SME sector in the country.

“I have seen that across all regions of the country availability of funds for the SME sector continues to the top challenge. To make the sector internationally competitive we will need to make funds, technology available. Also policies carved out by the government for the sector need to be implemented, both-- industry bodies and the government need to work together to make the SME sector competitive”, said Kavi Arora, Managing Director and CEO of Religare Finvest and also a member of the CII National Council for the SME sector while speaking to Express.

Regarding the sector in times of the ongoing slowdown, Arora, said it will maintain a 20% natural growth.  “The market is not negative now in the SME space, it is a bit conservative now,” Arora said adding that entrepreneurs in the sector were opting to go slow in times of downturn.

Out of the 1,40,000 SMEs that dot India there is a significant number of SMEs in the  Southern part of the country.

 On being asked if the sector was doing well in South, he said “We have a strong presence in Southern India, especially in Tamil Nadu, Andhra Pradesh and Karnataka but added that because of issues pertaining to illegal mining, slow down in the infrastructure sector, the SMEs in Andhra Pradesh were not doing well at this point of time.

He said that because of the slowdown in European markets, small and medium enterprise units in Hyderabad, Chennai and Coimbatore were also on a conservative growth path. “We will continue to be there in these markets. The situation will change we hope,” Arora added.

The government should assist the SME sector as these were the growth drivers of the economy and contributed as much as 17-18 per cent to the country’s Gross Domestic Product.

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