29 May 2020

SME Space

SMEs need innovation to improve process and management, to reduce cost and improve productivity



SME Chamber of India is India's leading organisation working for the growth of SMEs for the last 20 years and represents a large number of members from manufacturing, infrastructure, energy, petroleum, plastic, pharmaceuticals, chemicals, IT, ICT, electronics, logistics, agriculture, food processing, textiles, healthcare and service sectors industry. CHANDRAKANT SALUNKHE, FOUNDER PRESIDENT, SME CHAMBER OF INDIA, responded to CONSTRUCTION OPPORTUNITIES’ queries.




What is the role played by Small & Medium Business Development Chamber of India in empowering SMEs across the country – notably in the  infrastructure/construction/manufacturing domain?


The Chamber supports Indian and overseas SMEs to establish contacts, promote business and  bilateral trade, collaboration, joint ventures, technology transfers, contract manufacturing tie-ups, investment promotion and provides project consultancy advise on setting  up of new industries  both in India and other countries. It also provides support for strategic business partnerships. We regularly organise national and international level trade promotional activities, conferences and exhibitions in India and abroad, arrange delegational visits, B2B meetings as well as conduct research and market surveys.



What are the main achievements of your organisation in the SME space since it was founded? Tell us about the extent of your membership and the various services offered by your organisation?


The Chamber has been organising various national and international activities and empowering SMEs to achieve target growth. It has successfully created awareness amongst SMEs about advantages and benefits of various government schemes,  bank finance,  financial management, new entrepreneurship, networking activities between young and successful entrepreneurs support for acquiring  advanced technology, export promotion and international alliances.

The Chamber has put efforts to implement the following:

  • Collateral free loan from Rs 50 lakh to Rs 1 crore
  • SME Stock exchange
  • Electronic platform to get receivables from corporate and multinational companies by RBI
  • 42 point presentation to the RBI with suggestions to change the banking system for improvement of SME Sector


Because of the steps taken by us the following were initiated:

  • SME Business Management Institute
  • India-Japan SME Business Council, supported and recognised by the Japanese Embassy in India and the Indian Embassy in Japan,\as well as JETRO (India)
  • India-GCC SME Business Council
  • Europe India SME Business Council
  • SME Business Club
  • SME Export Promotion Council



Tell us about your efforts to enhance trade and connectivity between Indian and overseas entrepreneurs, investors, government agencies and multinational companies?


We organise trade delegations to overseas countries, B2B meetings with foreign delegations for outbound and inbound business activities and investment, liaison with government departments and embassies for enhancing connectivity of SMEs to identify various business opportunities abroad.



What is your assessment of the progress, or lack of it, by India’s SME sector particularly those related to the area of construction/infrastructure?


There is still inadequacy of proper infrastructure.  SMEs are yet to pick up in the construction sector for want of proper guidance and financial support from the  government. Indian SMEs are not getting proper infrastructure facilities in their industrial zones like good roads, logistics, industrial water supply, gas, power at affordable tariffs. The government is not paying required attention for providing the basic amenities essential for smooth running of an industrial zone.  It is therefore very necessary that all concerned should look into these aspects to ensure industrial and SME growth.



Could you speak of the primary challenges for the country’s SME sector – and tell us how they could be addressed?


The main challenges faced by the SMEs are economic and industrial slowdown, delayed  receivables  from corporate and government agencies, not getting adequate and timely credits from banks, high cost funding, complicated and cumbersome procedures of banks for getting loans, inability to adhere to collateral/margin money norms of the banks. There are then issues like the need for funds to execute short term and urgent export and domestic orders, insufficient knowledge in financial management, unsatisfactory growth, poor quality infrastructure, lack of skilled manpower supply on time, high cost of skilled manpower, cash purchase of raw materials, quality and competitive cost of import, high cost of power, not getting handholding from government agencies for export promotion, limited and insufficient marketing assistance for export promotion for MSE.

Further branch managers of various banks are not keen to give collateral free loans to MSEs, high cost of advanced technologies, inadequate knowledge of international markets, impact of high inflation, impact of rupee depreciation on import, unavailability of similar and simple  format for financial loans and competition in local market. If the above issues are addressed properly by the concerned authorities, SMEs can make better contribution towards national growth.



What in your view are the must do steps for the governments – both at the State and Centre – to draw SMEs out of the low growth zone? What are your expectations from the new incumbent government?


Government should be more proactive in solving the problems faced by the SME sector promptly and on topmost priority since this sector is the backbone of the Indian economy.



Could you name some of your successful SME/MSME members and offer a few case studies?


Ken Enterprises Pvt. Ltd, ISK Bearings Industries, Supriya Chemicals, Sangeeta Academy, Emmbi Industries Ltd, Al Aziz Plastics, Jeekay Enterprises.



How easy or difficult is it for SME’s to access finance. Finance, invariably is a key issue for SMEs and come with various conditionalities which restrict growth in the sector. What are your recommendations?


Of course, SMEs face innumerable problems in getting adequate and timely finance for their various needs. Unless the banks and the government come forward with viable measures to solve this problems, SMEs will continue to face financial difficulties which will be the great hindrance to the nation’s progress.



Could you name nationalised/private banks and NBFIs that have an aggressive lending profile and are at the forefront of offering financial assistance to SMEs/MSMEs in the construction/infrastructure sector?


Canara Bank, SBI, SIDBI, Bank of India, Central Bank of India, EXIM Bank.



Can you think of case studies of successful turnarounds because of financial support offered such institutions?


Among the notable examples are the Ichalkaranji-based Ken Enterprises Pvt. Ltd., a manufacturer of textiles, which required funds for expansion. They approached banks but were unable to raise the funds required to expand its facility and thereby increase its production. Canara Bank however sanctioned the required funds instantly thereby enabling Ken Enterprises to expand and prosper.



With finance being a grey area how important is innovation in ensuring the development of an SME? Will you cite some examples of innovation leading to growth of an SME?


Due to factors such as globalisation and outsourcing, there is an increased pressure to improve efficiency and effectiveness of organisations. SMEs need innovation to improve their process and management, to reduce cost and to improve productivity. An innovative product will ensure a longer shelf life in the market as the customer will stay loyal. Innovation also gives an edge to an organisation in the market. Innovative products increase the standard of living and provides people with opportunities to improve their lives. Let us take the case of ISK Bearings Industries, which manufactures wheel hub bearing units for new generation cars. The company has invented wheel bearings to help reduce the consumption of gas by the automobiles, reduce wear and tear of the vehicle and subtract maintenance cost.



What are the key ingredients for SMEs to develop a leadership mindset which will drive growth and inspire innovation?  And how are you helping them achieve that?


The key ingredients would be awareness and perspective. A good leader needs to inspire people to work for them and do better or innovate. SME Chamber through its various events and conferences educates and mentors SMEs to adopt latest management tools and advanced technology to ensure better productivity and expansion plans.



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