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The Small Industries Development Bank of India (SIDBI) is looking at potential areas of financial support to the MSME (Micro Small and Medium Enterprises) sector.
SIDBI’s Deputy Managing Director N. K. Maini, who spoke at the SME CEO Knowledge Forum organised by UTI Mutual Fund in association with The Hindu Business Line at the Codissia Trade Fair Complex here on Friday, said that SIDBI was set up as a refinance institution initially. “We found gaps in financing over time. After undertaking a major re-positioning exercise within the organisation last year, we started looking to fill the gaps by stepping into areas that banks did not look into,” he told representatives of the MSMEs at the event.
“The Small Industries Development Bank had, in the process identified four niche areas where MSMEs need finance support,” Maini continued
“We extend support to such of those units that are into promotion of cleaner production technology and energy efficiency, in the area of receivables management, risk capital and services sector,” he said.
“All banks are comfortable funding the hard-core nut-and-bolt manufacturing companies. But there are quite a number of service sector units. These units have intangible assets and their services are based on cash flows,” he observed, adding that SIDBI has set up a special vertical for the services sector.
SIDBI has specialised transaction products to cater to the SMBs (Small and Medium Businesses), Maini said.
The MSME sector has been growing at 11-12 per cent over the last decade and this is higher than the growth rate of the country. The Credit Guarantee Fund Trust is a game changer for the MSMEs, he added.
Bhareth L. Ghia, Country Head – SME and Distribution Channel, UTI Mutual Fund said that the contribution by the 10-million-plus MSMEs in the country was significant, both on the production side and export front.
The MSMEs’ awareness of treasury management solutions is low, posing a huge dilemma to the entrepreneurs manning such units, he said, highlighting the myths about investments in MFs. He urged the participants to consider money market funds and made a broad comparison of the investment avenues.
Yogesh Dixit, Senior Director, Crisil stressed the benefits of rating enterprises. “Rated units will have access to funds from various sources, will be able to get funds at competitive rates, will help in winning government tenders, orders from both domestic and global players, besides growth and sustainability in business.’
Ratings position companies as ‘trusted’ and ‘credible’ business entities, he added.
While the number of SMEs opting for ratings is on the rise, more than 70 per cent of the rated SMEs are located in non-metro areas, he said.
Prashant Jain, Senior Manager (Tax), KPMG highlighted the tax compliance issues and the benefits that the MSMEs could derive by complying with tax issues.
Parthiban Sivanesan, Head, Vodafone Business Service Solutions, said use of technology would go a long way in improving the operational parameters of the MSMEs.
Aarati Krishnan, Head of Research, Business Line, moderated the event. She highlighted the trends and challenges of the large corporations and left it to the floor to deliberate on the issues concerning the SMEs.
The event was powered by Vodafone and supported by Codissia. Mahindra Geneo DC VX was the co-sponsor and Crisil and SIDBI, knowledge partners to the event.
revathy.lakshminarasimhan@thehindu.co.in
Source: thehindubusinessline
SIDBI’s Deputy Managing Director N. K. Maini, who spoke at the SME CEO Knowledge Forum organised by UTI Mutual Fund in association with The Hindu Business Line at the Codissia Trade Fair Complex here on Friday, said that SIDBI was set up as a refinance institution initially. “We found gaps in financing over time. After undertaking a major re-positioning exercise within the organisation last year, we started looking to fill the gaps by stepping into areas that banks did not look into,” he told representatives of the MSMEs at the event.
“The Small Industries Development Bank had, in the process identified four niche areas where MSMEs need finance support,” Maini continued
“We extend support to such of those units that are into promotion of cleaner production technology and energy efficiency, in the area of receivables management, risk capital and services sector,” he said.
“All banks are comfortable funding the hard-core nut-and-bolt manufacturing companies. But there are quite a number of service sector units. These units have intangible assets and their services are based on cash flows,” he observed, adding that SIDBI has set up a special vertical for the services sector.
SIDBI has specialised transaction products to cater to the SMBs (Small and Medium Businesses), Maini said.
The MSME sector has been growing at 11-12 per cent over the last decade and this is higher than the growth rate of the country. The Credit Guarantee Fund Trust is a game changer for the MSMEs, he added.
Bhareth L. Ghia, Country Head – SME and Distribution Channel, UTI Mutual Fund said that the contribution by the 10-million-plus MSMEs in the country was significant, both on the production side and export front.
The MSMEs’ awareness of treasury management solutions is low, posing a huge dilemma to the entrepreneurs manning such units, he said, highlighting the myths about investments in MFs. He urged the participants to consider money market funds and made a broad comparison of the investment avenues.
Yogesh Dixit, Senior Director, Crisil stressed the benefits of rating enterprises. “Rated units will have access to funds from various sources, will be able to get funds at competitive rates, will help in winning government tenders, orders from both domestic and global players, besides growth and sustainability in business.’
Ratings position companies as ‘trusted’ and ‘credible’ business entities, he added.
While the number of SMEs opting for ratings is on the rise, more than 70 per cent of the rated SMEs are located in non-metro areas, he said.
Prashant Jain, Senior Manager (Tax), KPMG highlighted the tax compliance issues and the benefits that the MSMEs could derive by complying with tax issues.
Parthiban Sivanesan, Head, Vodafone Business Service Solutions, said use of technology would go a long way in improving the operational parameters of the MSMEs.
Aarati Krishnan, Head of Research, Business Line, moderated the event. She highlighted the trends and challenges of the large corporations and left it to the floor to deliberate on the issues concerning the SMEs.
The event was powered by Vodafone and supported by Codissia. Mahindra Geneo DC VX was the co-sponsor and Crisil and SIDBI, knowledge partners to the event.
revathy.lakshminarasimhan@thehindu.co.in
Source: thehindubusinessline
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