‘Tech Transfer 2012′ shall be organized in collaboration with IKP Knowledge Park (IKP) in cities like Hyderabad and Ahmedabad. The counseling for technology transfer will start on February 9th, 2012 along with BioAsia event. Ahmedabad will host the event on February 22nd, 2012 with support drawn from Gujarat State Biotechnology Mission (GSBTM).

This is an excellent opportunity and a prospective platform for SMEs where they can learn about relevant technologies directly from industry experts. The technologies are aggregated from across the globe so as to give Indian MSMEs a clear picture of what is possible. ‘Tech Transfer 2012′ is going to be the right opportunity to fulfill technology related requirements of Indian life-science MSMEs.

An effective and efficient internal audit is required to be conducted. An audit exercise can help SMEs gain strong internal controls and hence the risk of fraud gets diminished. Right from raising funds and exercising regulatory compliance, integrity in supply chain as well as proper control over business continuity and expenditure can be arrived at.

Governance framework is crucial as it involves practices like effective risk and crisis management. Good safety policies are also crucial in this very context. A voluntary government framework that is smartly crafted and focused to the SME cause is recommended. For SMEs involved in overseas and export business, it is compulsory to opt for creditworthy tools that can protect business overseas and facilitate its growth.

SMEs comprise of 90 percent enterprises in most economies. They are being credited for successfully generating highest rate of employment growth. SMEs account for major share of industrial production and exports. Small scale businesses also face technological challenges and they have to overcome them so as to conduct business. Though ecommerce has become the best way to conduct business but then they lack the capacity to advertise and market their products. The other limitations faced are limited internal IT expertise and lack of managerial knowledge.

Management of risk thus becomes utterly important for SMEs. By doing so, they can successfully generate growth and employment. Other limitations like financial trouble can be successfully nullified with proper risk management.

An SME cannot become master of all trades and should not even try to do so. But it can be best in the areas of its strengths and should be in a position to communicate the main value proposition. This is the best way SMEs can serve its clients, i.e. the MNCs.

MNCs are also known to consider other factors while selecting a SME as their supplier. Product, Company, Price and Corporate responsibility are the basic criteria. Price is a basic criterion for raw materials or basic services. Quality of service is also a key consideration. Another criterion is ‘delivery’ that is very vital for time-sensitive industries. So, it is very important for a SME to understand the needs of its clients i.e., (MNCs), assess its own capabilities, and then make the right choice.

MNCs do not consider size of a company to be an important factor for service. Most of them do not categorize companies per their size. So, SMEs always have the chance to win a contract as any other company. The only thing is SMEs should play on their strength. MNCs also want to form long-term collaborative partnerships. This can also mean opportunity for SMEs as MNCs will invest in suppliers for long term success. Moreover, the non-availability of too many suppliers in one particular sector opens opportunity for SMEs.

This article was submitted by Raj Tulshan, Director of Business Development of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to info@biz2credit.com

We understand, it takes a lot of hard work to establish a business and it is equally important to expand the business. To be in the competitive market, one needs to keep pace with the competitive demands of the business. It is always good to be innovative with your business expansion especially when you plan to take an equipment loan. But make sure that you use this capital to finance anything which makes sense.

Business equipment loan can be availed by sole proprietors, partnership firms, private limited companies, and professionals. However, the criteria of getting equipment loan vary from the kind of business and its need. Of course, we get the purchasing power and flexibility to obtain the best equipment available as the payment is more affordable and this form of capital is easier to come by. The following information may also help you to know the basic yet specific needs related to this type of loan.

There are many sources of business equipment loan in India. Though, the policies to get the equipment loan differ from case to case yet there are some common things which a bank or the financial institution takes care before any approval. Loan terms vary according to the size of the loan, the planned use of funds, the requirements of the intermediary lender, and the needs of the small business borrower.

Incidentally, such loans are always secured and are extended with a clear cut repayment plan which equated monthly installment, tenure of the loan, interest rates and other very important terms and conditions. It also depends on the individuals to companies. Company’s worthiness, track record, tenure and the profit and loss statement or balance sheet of last 3 years. In case of individual, it depends on years of employment (minimum 3 years), bank statement, and salary proof. Some common documents are also required e.g. Proprietor/Partner/Director of the company, Employees of Public Ltd. / Private Ltd./ MNCs Or Government, ID proof : Pan card/ Passport/c Driving License, Age Proof, Office Proof, income proof and Residence Proof. Bank also checks whether the company or an individual is a regular borrower or a first timer.

Repayment: These loans are available at low interest rates and convenient EMIs. The amount of EMI will depend on a number of factors such as loan amount, tenure of loan, financial standing of the person taking the loan.

Loan can be obtained by either filling an online form or directly approaching the bank. A processing fee is normally charged by banks, which is around 2% of the actual amount of loan.

Hence, the loan can be designed as per the requirement of the borrower and at the same time the convenient of the lender.

The five clusters in the state of Haryana responsible for energy conservation are light engineering in Faridabad, plywood in Yamunanagar, power looms in Panipat, rice mills in Karnal and utensils in Jagadhri.

The profitability of SMEs would get enhanced as a result of every unit of electricity that is saved by the SME units. Further, in Faridabad, SMEs would receive help through a world-bank funded project that is being implemented by Sidbi. This will help units embrace energy efficient measures at reduced rates.

The units are made more conscious about energy efficiency by conducting walk- through audits. They are initial audits and are being followed by full-fledged audit of every unit. Based on the audits, recommendations are given to units for better energy conservation. Faridabad Small Industries Association (FSIA) believes that 200 old units can benefit from the project.

Tata Energy and Resources Institute (TERI) that is instrumental in implementing a Business Development Service (BDS) project in clusters in Chandigarh, Mohali and Panchkula has conducted pilot energy audits in at-least four manufacturing units to help SMEs of the region recognize their energy conserving potential. The audits suggest that units can reduce their consumption of electrical energy by 20 percent and thermal energy by 7 percent.

Under the new scheme, the IIE has involved experts and is making use of software technology to improve on design and skills of weavers. The weavers are found involved in making bedsheets, shawls and towels from cashmilon. The project is meant to magnify the skills of weavers and their designs. It is a three year project that started in 2008.

The expenditure for making the Mangalore cluster is Rs 60 lakh with Rs 51.95 lakh support received from the centre and Rs 7.37 lakh coming directly from the state government’s kitty. Initially, IIE established 32 self-help groups of weavers and started their bank accounts too. Then a federation under the aegis of Mangalore Handloom Society also got created aimed to work as an umbrella organization for the weavers.

A special skill development programme has also been initiated for weavers. This new programme has helped Amir Ahmed to be trained as the master trainer at Weaver Service Centre, Meerut. IIE has also selected computer added text design (CATD) software to make improvements in design. IIE now targets to establish a common facilitation centre (CFC) costing 30 lakh.

This article was submitted by Raj Tulshan, Director of Business Development of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to
info@biz2credit.com

This is a step forward to make a platform for the Governments of the two countries to discuss issues related to MSMEs and also explore the means of cooperation so as to benefit the MSME sector in both the countries. Under this memorandum of understanding a structured framework has been worked out so as to enable the MSME sector of both the countries understand each others strengths, technologies, markets and policies. There is also an agreement to allowing participation in trade fairs and exhibitions of both countries and an exchange of business delegations. There is agreement to make policies transparent, exploration of markets so that tie-ups, joint-ventures and technology transfer can take place without any friction. There is absence of legal, financial and political bindings for both countries.
The Ministry of MSME has till date made long term agreements in the MSME sector with Ministries of 13 other countries.

The agreements include Memorandum of Understanding, Agreements and Joint Action Plans. The cooperating 13 countries are Algeria, Botswana, Cote d’Ivoire, Egypt, Korea, Lesotho, Mexico, Tunisia, Romania, Rwanda, Uzbekistan, Sri Lanka, and Sudan. So, doors have been opened up for new opportunities of the Indian MSME sector by means of joint ventures, technology collaborations, new market discovery, best practices sharing, and other similar roles.

The reason for such growth has been the expansion activities undertaken by SMEs manufacturing auto component so as to meet the growing demand of automobiles in the country.

According to Jayant Davar, president of ACMA, the automobile sector recorded 30 % sales growth signaling the growth to surpass 18 % in the current fiscal year. He comments “The adverse impact of the global economic slowdown is now a thing of the past and the auto industry witnessed unprecedented growth in 2009-10. Auto components imports crossed US$8 billion, however, exports remained flat at US$3.8 billion owing to slow recovery in the US and European markets.”

But then there are also constraints faced by small and mid-sized auto component manufacturers. High input costs, poor infrastructure and power shortage are hindrances to the growth momentum. In-spite of such constraints, ACMA is looking forward to US$3 billion investment every year on a continual basis for 10 years.

There are sectors and business places in India that are hard-hit and are struggling in the aftermath of the recession.

1. Decline in IT and ITeS sectors (IT enabled services) have curved the graph of negative consequences on industries like Tourism and consumer durables.
2. Moradabad, famous in the entire world for its handicraft industry is now witnessing closing of its workshops due to price rise of raw materials like brass. The artisans are left unemployed.
3. Kanpur, the Manchester of India, is neglected, has a poor infrastructure and its industries are closing down.
4. The famous Tussar silk fabric of Bhagalpur, exported to places like US, Europe, West Asia and Japan, is jeopardized by competition from new silk manufacturing centres like Bangalore and Ahmedabad. Lack of credit and power shortage has added to the decline of this big trade centre of Eastern India.
5. Tirupur has serious infrastructural constraints, despite Union and State government’s support in the past. For past several months, the city is struggling with power cuts and poor transport system.

Neo Liberal policy

Neo liberal policies offer solutions to problems faced by SMEs. The policies offer reduction in taxes, credit guarantee and related measures.

The efficacy of such policies can be analyzed from the impacts on SMEs. The impact can be categorized as under:-

1. Shadow entrepreneurship where an individual is left with no other choice but to become an entrepreneur.
2. Pseudo entrepreneurship meaning the start up and sustenance of entrepreneurs who are lacking in the key elements of entrepreneurship like value creation and business ethics.

Recessionary Trend

The symptoms of recessionary trend spread from financial sector to real sector. Its effects on MSMEs follow this pattern. Recessionary trend shows up in the economy in terms of effects like ‘Sentiment’ and ‘Expenditure’. The sentiment effect results from signals received from financial system. It may be failure of stock markets and crisis in leading sectors. In such a case, financial institutions become more cautious about their lending policies. The expenditure effect is a curb on expenditure by MSMEs as business orders start reducing due to recession. Postponement of payments to creditors and workforce also become common due to the expenditure effect.

Less Protection

Initiative taken to improve labor laws is half-way inspite of efforts to liberalise labor laws. Paradigms like ‘flexible specialisation’ and ‘global value chains’ as found in international level are absent in MSME sector in India as it functions as ‘Sweat shops’. Then ‘blanket freedom’ in some sectors is another key problem that has hidden the policy advantages related to MSMEs.

The interests of MSME sector is jeopardized by distortions in public policy. However, attempts are being made to bring about improvements. For example, the ‘MSME cluster development programme,’ enhances individual firm’s competitiveness on a ‘collective efficiency’ mode. The advantage of the Indian manufacturing sector is its highly distributed character. So, because of its distinct economics and sociology, any recessionary shock does not straightway percolate in the sector. To provides resistance to economic downturns and toendure upon this situation, public policy needs to amplify from its current neo-liberal approach. When policies are broad-based, it will be possible to distribute the loads of a recession in the entire economy.

Delayering would improve performance in the lower-middle management levels and improve communication by promoting direct dialogue between lower-level managers and executives, Ret. Lt. Col. Nageshwant Roy Vaid, CEO of Orbit Industries Limited, told the SME Times.