A major reason for this crunch is the political instability in Middle East and African countries. They are major export destinations for Rajkot’s diesel engine manufacturers. But during the span of last two years things changed. Rajkot’s diesel engine manufacturers now are forced to take up other businesses and move out from the cluster.

Submersible pump is giving tough competition to diesel engine users. The reason is electricity is available in most part of the country and so the pumps are being used for agricultural purposes too. This has certainly reduced the demand as well as supply of diesel engines.

The illustrations of the crunch are many. For example, ‘Power Engineering’ reduced its production from 3,500 engines to 2,000 engines every month in the span of last two years. Prem Engineering Pvt. Ltd also witnessed its international business to be down by 50 percent last year. There is no expectation of good business or recovery in near future days to come. The pump business has taken over and there is little hope for diesel based engine manufacturers. Besides, Rajkot is also seeing auto-parts industry booming. Every year 30-50 new players enter this sector. This has certainly turned off the mood of diesel engine manufacturing.

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.in

Tamil Nadu (TN) based MSMEs are very large in proportion as there are 700,000 registered units in the state itself providing 5,000,000 jobs. The State government’s estimate says that SMEs made investments worth Rs 32,000 crore in the State.

A ‘Vision 2023 document’ has been released by Tamil Nadu Government that encompasses details about access to finance, regulatory environment, access to technology, market access and infrastructure availability.

The TN minister of Finance has said that the government is going to revive all District Industries Centres so as to provide better infrastructure at a marginal cost of say Rs 50 crore. The TN government is also planning to promote clusters in new areas and is going to form industrial estates in regions where MSMEs are scattered.

There has also been an announcement in budget 2012-13, that the state government will implement a new scheme ‘New Entrepreneur-cum-Enterprise Development Scheme’ (NEEDS) in 2012-13. This scheme is going to start training sessions for educated youth, assist in business plans and enhance tie-ups with financial institutions to start new business ventures. The entrepreneurs will be given assistance to avail loans from banks up-to Rs 25 lakh. Training will be given to 1,000 entrepreneurs every year out of which 50 percent will be women.

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.in

This initiative is going to be a boon for people living with HIV. People in Manipur acquired the virus through intravenous drug use. So, the Government is willing to help and now, with microloans, they can start weaving business, small embroidery or a grocery store business.

However, there is a concern that since people in Manipur are drug users, they may misuse the loan money to buy more drugs. So, there has to be a monitoring system to look into the situation. It is also crucial to find out how long banks take in implementing this loan scheme throughout India. The reason is India’s total HIV burden is much greater than the state of Manipur.

The financial stress on people of Manipur due to HIV is too great. The disease crippled people as 43 percent of HIV households either borrowed or liquidated assets to overcome financial overburden. The micro-loans are a respite for households facing serious constraints.

Micro-loan initiative of India will see ‘United Bank of India’ and ‘State Bank of India’ offer loans up-to 500,000 to people who meet eligibility criteria. Indian Nationals having a valid work plan and who are HIV patients can apply for this loan grant. The micro-loan is going to support entrepreneurship as people in Manipur are found to be skilled and versed in traditional handicrafts, crafts, et cetera, and so on.

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.in

The rehabilitation fund will be available to all MSMEs that are not doing well. RBI has found that there has been a 16 % rise in sick MSME units from 77,723 in March 2010 to 90,141 units in March 2011.

K C Chakrabarty, Deputy Governor RBI, opines that banks have been directed to draft their MSE loan policy, rehabilitation policy and non-discretionary settlement scheme. RBI will work on the policies as credit availability to MSME sector continues to remain a major issue. A corporate governance code and corporate governance framework are also necessary to take MSMEs of India to higher growth levels.

There is also a need to provide venture capital to startup SMEs. In-fact, there is a proposal in 2012-13 budget for setting up Rs 5,000 crore ‘India Opportunities Venture Fund’ with SIDBI. Currently, there is negligible flow of equity capital in SME sector. The setting up of MSMEs exchange will eventually help SMEs raise funds from capital markets.

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.in

The company is in a continuous process of growth in business and is making innovations in products so as to better meet the SME community needs. Lenovo is aggressively making strides in the SME space according to its director, Rajiv Rao. The store is just one step forward in making the Think Range PCs available to retail buyers and SME customers.

In fiscal year quarter four 2011 (FYQ4 2011), the company had a market share of 6.8 percent and this is testimony of its success. Now, the company is planning to diversify its operations. For this very reason, it has appointed nearly 500 retailers to penetrate into the SME market. Lenovo has Think Range products for SMEs like notebooks, desktops, laptops, tablets and all-in-ones.

The Directorate General of Foreign Trade (DGFT) prohibited cotton exports till new crop is harvested. The decision has been taken due to low yields and more-than-expected exports of cotton that happened because of strong demands from countries like China.

India shipped 66 lakh bales of cotton to foreign countries in 2010-11. Also 85 lakh bales have been exported in the current fiscal year ending on 31st March. So, keeping the shortage of cotton yields into consideration and the need of cotton in domestic MSMEs, the decision has been taken.

This is not a very welcome decision as even president of the Cotton Association of India, Dhiren N Sheth, said that it will harm India’s reputation in international market. Also farmers won’t get the same price for heir cotton production as they earn from exports. But then the present situation has compelled the government to ban cotton exports as otherwise it won’t be possible to save the domestic market. The step will help domestic cotton industry to maintain its production levels.

A.Sakthivel, Chairman AEPC, opines that ECB window is very essential for MSMEs keeping into consideration the criticality of global market and necessity to retain a competitive edge. ECB can become a means by which Indian corporate and PSUs can find foreign money that can be used for working capital. However, the present Development Financial Institutions are also expected to continue making available high risk loans and cater to meet the needs of small and medium scale units.

Council Chairman, Sakthivel, also made a request that exporting units should gain access to foreign currency credit that currently is not been given by banks. This if granted will considerably help to reduce cost of credit. Sakthivel also requested government to relax excise duty at 10 percent interest rate and implement zero custom duty for import of machinery, manmade fibres and also introduce Goods and Service Tax (GST) in India. For SME Units, investment limit should be hiked from Rs. 10 crores to Rs. 25 crores.

Small and Medium Enterprises in Haryana complain about having constant problem of delayed payments from their customers. The ‘MSME Act of 2006′ has prescribed that it is mandatory for customers to make payments to SMEs within the set stipulated period. The provisions of Micro, Small and Medium Enterprises Development Act, 2006 also make it essential for buyers to pay micro or small enterprises for their goods and services within 45 days of delivery.

Haryana facilitation cell is constituted to look into payment grievances. It is making it known to buyers that if they do not pay back the supplier within the stipulated period then they are liable to pay compound interest for delayed payment. The rate can then be three times compared to that of bank rate. Thus, the facilitation cell in Haryana has come to aid MSMEs and is redressing their problems. However, the cell acts only after receiving complaints from a SME enterprise.

The SME Stock exchange got its clearance from Securities and Exchange Board of India (SEBI). It is believed that the stock exchange would help to resolve start-up issues of SMEs. The bourse is going to initiate talks with qualified intuitional buyers, mutual fund houses and banks so as to start investing in SME exchange.

Lakshman Gugulothu, BSE SME Exchange CEO, says that 30 to 40 companies signed mandate with merchant bankers and some are in advanced stage to hold discussions with merchant banks and merchant makers.

The minimum criteria kept for getting listed on the SME exchange is the company should have at-least 50 investors and Rs 5 million IPO paid-up capital. Listing is compulsory for companies with Rs 5 million to Rs 100 million paid-up capital. For companies having paid up capital ranging between Rs 100 million and Rs 250 million, there is the option to be listed on either the SME exchange or main board (IANS).

When the bank management starts to monitor the loan applications then obviously more SMEs will find loans. The banking sector is not doing much for the SMEs now. Not just this, even the venture capitalists are not doing enough to boost the SME sector. Many SMEs as of now do not have expertise in financial management. They need consultancy services to manage their financial condition.

Chakrabarty said that banks should maintain transparency in interest rates and should keep disclosing the interest rate that they are charging. Top banking officials, however, say that bank officials are compassionate and are willing to grant loans to business enterprises.