The association President, Mr Xavier Thomas Kondoy said in a statement that the debt restructuring mechanism, which is applicable to big companies and has now been introduced to the SSI sector, is a great relief. The one time settlement on NPA account will help rehabilitation of large number of sick units.
However, the introduction of credit rating system, if its cost is borne by the lending institution itself, can be beneficial to the sector in the overall reduction of the cost of borrowing, he added.
Indian SMEs need access to finances
Indian small and medium enterprises (SME) have not kept pace with the country's economic growth because of their inability to access finances, says industry experts.
The reasons for the poor growth of SMEs and strategies to put them on a high-growth curve were discussed Tuesday here during the launch of the first publication in the series of 'Emerging Auto Component SMEs of India.'
The first of its kind, this series is sponsored by Dun & Bradstreet, the US-based leading provider of global business information, in collaboration with the SME Rating Agency of India (SMERA).
"Recent research at the World Bank has re-established that the inability to access finance may be one of the reasons why we do not see a robust correlation between SME prevalence and the economic growth," emphasised David Emery, president, international partnerships and Asia Pacific, Dun & Bradstreet.
"Increasing the strength of the financial system of the country will help Indian SMEs continue on their growth path," Emery stressed.
Dun & Bradstreet India chief Manoj Vaish said: "Owing to several factors, SMEs are not able to generate visibility in global markets. Through the Emerging SME series, we aim to provide a platform for SMEs in the respective sectors to prove their strength."
N. Balasubramaniun, chairman of SIDBI and SMERA, said: "The benefits of cluster-based financing approach include lower transaction and monitoring costs through reduction in costs of data, standardisation and reduction of documentation."
SMEs around the world tend to grow in clusters and India is no exception, said Rajesh Dubey, chief of SMERA.
The book profiles 370 companies with a turnover of less than Rs.1 billion. According to this publication, SMEs account for almost 90 percent of industrial units in India and 40 percent of value addition in the manufacturing sector.
