Saturday, January 16, 2021

SME Space

We aspire to reach out to 10,000 MSME units to fulfill their growth aspirations 



Electronica Finance Limited (EFL) is a leading Pune headquartered Non-Banking Finance Company (NBFC) focussed on MSME finance. Since it started its operations in 1990, most of it in the area of machine loans, the firm has emerged as the market leader through its 35 main branches in over 60 industrial cities across India. In addition to machine loan, EFL also offers a bouquet of allied financial services like business loan and top up loans. SHILPA POPHALE, MANAGING DIRECTOR, ELECTRONICA FINANCE LIMITED responded to CONSTRUCTION OPPORTUNITIES queries about the areas of organisation’s focus.




Give us a sense of your achievements in the SME finance space in the 24 years since the founding of Electronica Finance Limited?


Electronica Finance Limited (EFL), formerly known as Electronica Leasing and Finance limited, is a closely held Non-Banking Finance Company (NBFC) incorporated in the year 1990. The company is registered with the Reserve Bank of India to carry on business as an Asset Finance Company.  EFL was established with the intent of equipping ambitious and potential Entrepreneurs with the financial capability without having to lose valuable time. By saving time EFL provides a great opportunity for Entrepreneurs to increase productivity and garner profits. Initially, EFL started its activities as a natural extension of its parent manufacturing company. It is now well established as a specialised MSME asset financer.




Tell us about your national network and the extent of funding done by your organisation?


We started operations from Pune. Today we have spread across the nation with 35 branches catering to 250 industrial belts. We have over Rs 600 crore of assets under management which is diversified into various segments like machine tools, plastic, printing, wood working, textile, generator, packaging, pharma etc. As on date EFL has catered to about 4850 customers.




What are the industries Electronica Finance has supported? Give us a sense of your lending portfolio in relation to industries allied to construction/infrastructure and real estate activities?


EFL started lending to the machine tools industry from its inception. As time progressed EFL diversified into plastics, wood working, printing, packaging, pharma etc. In the future we would look forward to expanding to other industries.




Can you offer some perspective on the MSME sector and the challenges they face?


MSME customers are technically qualified first generation entrepreneurs who have viable business plans but face difficulties and constraints in meeting their goals. The business model of EFL is based not only on their papers but beyond that. EFL is well versed with this kind of customer portfolio and therefore finds it most suitable and secure for financing. Almost 98 per cent of the customer profile consists of micro and Small Scale Industries (SSI). This is approximately 40 per cent of the country’s domestic production, almost 50 per cent of India’s total exports, 45 per cent of India’s industrial employment, 35-40 per cent to the GDP and account for more than 90 per cent of all industrial enterprises in India.




What are the challenges faced by SMEs in terms of obtaining finance?


MSME in India is typically a sector of unorganised customers, mainly in automobile, engineering, plastic, wood working, pharma, food processing and printing industries.  Most of them are first generation entrepreneurs, technically qualified but unable to arrange finance because of certain limitations. Typically there are a lot of issues they face while generating finance from the organised banking segment. The key issues include availability of timely and adequate finance including credit; high cost of credit; limited access to equity capital, absence of infrastructure and institutional structure, lack of raw material, technology upgradation, marketing and procurement not to mention skill development and training. Further there is also a lack of understanding of the industry by financial institutions, a pre-conceived mindset and long process of sanction and disbursement, guarantees and fear of accountability, CIBIL verification; internal rating guidelines and high documentation; insistence on collateral security and front line not aligned with bank’s goal. Such a scenario hampers MSME growth and hence the growth of the Indian economy.




What are the various financial schemes offered by Electronica Finance Limited? What are the conditionalities for financial support?


EFL provides the following products: Term Loan, Higher Purchase, SIDBI subsidy, IPL or Industrial Property Loan and consultancy services to MSME. As for conditions for availing finance is concerned, we rely on the following: technical details; the company should be registered with a government authority; a minimum three year’s vintage is mandatory for the firm seeking assistance; we require 6 months bank statements, KYC documents, information about their setup and processes, end user knowledge and the company’s track record with financiers. We also factor details like surroundings, lifestyle and behaviour of the customers, reference checking.




To what extent has EFL been able to minimise MSME sector challenges?


EFL with its experience in the MSME segment has well understood the gap between requirement and available facilities. It has developed a customer friendly approach in rendering its service to the highest level of entrepreneur’s expectation. We approach the customer within 24 hours of the inquiry with door-step service: the finance is made available within 7 days. The only collateral required is machine/asset only. Among the other advantages are a flexible repayment scheme; association with SIDBI, L/C opening facility for imported machines. With its manufacturing background and sector expertise, EFL has consistently maintained its portfolio quality. The NPA level of the company has remained consistently at an enviable level of below 0.2 per cent despite recent market cycles and fluctuations.




With finance being an area of concern for SME to what extent does innovation help in the success of SMEs?


Considering the fact that Indian MSME segment has to meet the global standards and finance being a major challenge, innovation is inevitable. Indian SMEs are implementing new and innovative information and communication techno-logies on a large scale like Software as a Service (SaaS) and Infrastructure as a Service (IaaS). Through the dimensions of technological innovations, MSMEs intend to achieve cost-effectiveness, improve product quality, extend product range, improve cycle time, increase market share, improve production flexibility, reduce energy consumption, improve work conditions for employees and improved versions of existing products to gain and maintain technological advancements.    




Being a woman entrepreneur yourself give us an understanding of the empowerment being offered to women by your organisation?


Through CSR initiatives we have offered support to rising women entrepreneurs from slum areas. We have provided them funds in the form of seed capital or working capital to develop and expand their business. EFL has been able to uplift the life of 150 families from slum areas. 




What is your outlook for the SME sector for 2014-15?


We are very optimistic about growth in the new financial year and have diversified our portfolio introducing services in medical, textile and pharma industries. We expect to grow in double digits this year. EFL remains committed to financial inclusion and aspires to reach out to 10,000 MSME units awaiting quick machine loans to fulfill their growth aspirations.



Leave a Comment

Email Address
(will not be published)