The 2018 budget was a big nod in the direction of the major voting banks of this country. The farmers, the poor and the small-scale industry players struggling to make ends meet. While the middle class has found a lot of reasons to mourn about, it seems that the BJP government in its election-induced hysteria…
The manufacturing sector contributes 17% to the country’s overall GDP of which 45% of the manufacturing sector’s output is contributed by the SME sector alone. The SME sector forms an integral part of the Indian manufacturing sector and enjoyed a sheltered existence with a high tariff on imports, fiscal incentives and a monopoly on the manufacture of certain goods. However, the reform era beginning 1991 opened India to trade agreements with other countries that proved advantageous to organizations that held a monopoly in their respective trades. To help with this and augment the global competitiveness of the Indian micro, small and medium enterprises (MSME), the Government of India in partnership with the MSME ministry launched a set of schemes under the National Manufacturing Competitiveness Programme (NMCP). These schemes which began to be implemented in 2006 aim to give these enterprises a competitive edge to survive in a liberalised economy.
Please follow and like us:
According to the International Finance Corporation, the total financing gap in the SME space is Rs. 2.93 trillion. One reason could be that financial institutions mostly cater to the demand of traditional collateral-based lending, leaving out many SMEs without funds and dry. SMEs hence turn to alternative finance solution like Invoice financing, asset-backed contributions, letter of credit and others for their capital requirements. Out of these, Invoice Financing is their first choice.