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.

It is true that lending loans to SMEs has recently gone up but then SMEs are still faced by many challenges. India’s Axis Bank recently recorded growth in retail loans. The net profit of the bank has seen 24% rise in third quarter. For October-December period, profit climbed INR11.02 billion from INR8.91 billion in a year. Likewise, peer HDFC bank too reported 31% rise in profit to INR14.30 billion. In the ‘SME Leaders Conclave’ small business owners are being informed about banks and private lenders that are financing businesses.

Indian SMEs can expect to see growth in recent times keeping the current lending scenario into consideration. Banks as well as private institutions and credit unions are offering loans to businesses to help them meet their expectations. As the loan number keeps growing, more and more businesses are getting access to the line of credit they ask to financial institutions. ‘SME Leaders Conclave’ is where people are informed about loans available to business enterprises.

The key focus of business finance courses is to teach the art of managing money for both corporate and personal needs. The main objective is the identification of training needs which includes economic, political, legal, financial, and cross-cultural issues.
The other activities to make the business finance course successful for SMEs are:

• To use effective training strategies and methodology to target different industries;
• To promote and support entrepreneurship proposes government and non-government training program;
• To organize conference, workshops, and seminars for evolving effective training;
• To design training programs for existing entrepreneur;
• To manage programs for imparting knowledge in import and export business.

These above activities help in different ways like improving entrepreneurial skills of small and medium enterprises, SMEs. It facilitates new business people for setting-up a business and also to existing one to use modern opportunities, strategies, and latest technical methodologies for effective and competitive growth and profit.

The other advantage organizing seminars and workshop is awareness about the development in SMEs industry. It gives a forum to meet experts and share problems related to business and their solutions. One of the problems could be how to launch and manage a business projects successfully? Interaction with experts also educates entrepreneurs about the importance of entrepreneurship in academic curriculum.

Apart from the core activities some functions related to the finance course are equally relevant such as:

• Upgrade knowledge in the respective action to start-up a new business and manage its day-to-day activities;
• Understand the national and international markets;
• Market development and assistance to conduct surveys and reports;
• Channelize finance to understand the methods to get a hold on finance;

In India SME Training institute of India (a government institute) took the initiative for small and medium entrepreneurs to create opportunities and give motivation for self employment. Moreover, these finance training courses help people to set them for a number of carrier paths in corporate finance.

Morbi is no longer a favourite destination for wall clock buyers for the negative growth Morbi has been experiencing. The main reasons are increase in Value Added Tax (VAT) and transportation costs. The next door neighbour, ‘Chinese Players’, has also intensified the competition. Now the industry pays 15 % tax out of which 12.5 % is VAT and 2.5 % additional tax.

Clock industry workers have started to migrate to other industries like Ceramics considering bleak outlook. Some Morbi workers have also migrated to Ahmedabad and Rajkot for work. The State Government has been requested to reduce VAT to four percent but no response has been found as yet.

The situation has led to decline of even Ajanta Clocks by 75 percent. The company is now producing 25,000 clocks every day as compared to 1 lakh clocks per day 10 years before. It is true that the market share of Morbi has declined but then it is still leading clock producer in India. A lot can be done if VAT rates are brought down and the manufactures are provided small business loans.

The increase in oil process has led to rise in transportation costs. This resulted in increase in production cost of wall clock manufacturers by 40 percent. Growth of clock industry in other Indian cities has led to Morbi’s business decline by 25-30 percent. Out of the 300 clock units in Morbi five years ago, only 100 to 125 are active.

The research conducted by Vijya Research & Advisory states that there are 100 lakh SME units in India with net investment totaling above Rs.1 lakh crore. During last four years, SMEs have seen double digit growth. The annual contribution of SME sector is 40% to industrial production and 6% to GDP.

Market Report of SMEs in India details the SME sector in terms of size, output, investment, products and form of enterprise. This report is an insight to regulatory framework for the sector, growth prospects and the challenges SMEs face in the course of its growth.

Manufacturing segment dominates the SME sector in terms of number of available enterprises. In the research it is found that partnership is very common in small and medium enterprises. Business units also register as private companies.

It so happened that initially ‘Delicia Foods’ found it difficult to establish business due to lack of funds. But then eventually it found Bharti Walmart whereby it could finalize a deal to produce private label Jams and Ketchups. The firm came out successful as it supplied its products to Easy Day Supermarkets and Best Price wholesale stores. Its annual revenue then jumped four-fold and it reached up-to Rs 2 crore. The company now has started to make supplies for other wholesale chains of the likes of ‘Metro’ and ‘Carrefour’. So, ‘Delicia Foods’ has accelerated and made tremendous progress. Funding is no longer an issue for the firm now.

Delicia Foods is just one thousand of SMEs having assets less than 5 crore. Such companies are dependent on acceptance by modern retail for their improvement and progress. During past five years, many such entrepreneurs began their journey with the intention to become a supplier of a booming modern trade.

Walmart and Bharti Enterprise have signed a pact to support SMEs in a number of ways. ‘Bharti Walmart’ has already formed a network comprising of 400 SMEs in less than three years of entering into India. It is estimated that Indian SMEs supply over 40 % of products to Bharti Walmart.

The objective of the project is to increase adoption for energy efficiency investments in SME enterprises and to build capacities for accessing commercial finance. The project is going to be co-implemented in Ankleshwar industrial region by SIDBI, BEE and Cluster Pulse.

This initiative of World Bank shall enable Ankleshwar cluster to build capacity, awareness, and marketing and outreach effort. The project will conduct activities so as to facilitate increase of investment for energy efficiency of SMEs. The World Bank and SIDBI envisage that the initiative will be useful for addressing specific problems of cluster, enhancing energy efficiency in SMEs, technology up-gradation and reduction of transaction costs.

The IIM Lucknow ‘Entrepreneurship Summit -2011′ brings budding entrepreneurs, venture capitalists, faculties, students, SME owners together on one platform. This is an appealing dais for entrepreneurs and students to present their ideas. Here, starters can also seek mentoring and guidance from industrial veterans.

This summit is a unique opportunity to showcase ideas among like-minded people and seek advice and guidance. People aspiring to become entrepreneurs can discuss the feasibility of their ideas and funding options available to them. Students during the interaction can learn about real life scenario, strategies followed and problems encountered by 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

Yadavendra says Small and Medium Enterprises (SMEs) in the fashion industry are having problems with the design as well as infrastructure. But, they are good with technology and are in a position to accelerate. SMEs in fashion industry need to unlock their true potential and support the government in new policies and regulations.

The SMEs are not willing to spend money to upgrade their infrastructure and this is the root cause of bottlenecks that they are facing. The National Manufacturing Competitiveness Program (NMCP) is a scheme under the 11th Five Year Plan. It has ten components out of which design is one component that is very prominent. The SMEs are going to receive support under the Public Private Partnership (PPP). The government is going to contribute 80 percent of total costs while 20 percent has to be procured by the SMEs themselves. There is also a proposal for making a tool room where SMEs can find all the tools that they require.

The industry has been asked to endorse student’s ideas and bring them together with their own design to develop it. The government is inviting such initiatives and will provide all needed infrastructure and facilities. There is also the need of more fashion institutes to come up. Installation of design facilities for developing skills among aspiring designers is also required. ‘E-commerce’ activity needs to be popularized as it is going to expand exponentially in future.

The industry is worth Rs 400 crore and supplies materials to automobile manufacturers, railways and government departments. Almost 80 percent of the enterprises are from the micro-manufacturing category.

The reason for this deterioration is price hike of raw materials like Wire rods and MS rounds. Price has risen Rs 6,000 per tonne during last few months. Cost of working capital has risen 20-25 per cent during last three months. There is no infrastructure to train workers and so the skill-set of manufacturers is declining. A cluster-based approach can be the way out to salvage this fastener industry.