MSME Sector India: Strengths,Weakness,Opportunities & Threats

MSME Sector India:Strengths, Weakness, Opportunities & Threats

Helping Small Businesses Grow…

MSME Figures: A Sneak Peek1

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MSME Service Sector: ~71%

MSME Manufacturing Sector: ~29%

Highest Growth Rate (2011-12): 18.45%

Growth Rate (2013-14): ~ 12%

Top 5 Industries: Retail Trade 39.85%,

Manufacturing of Wearing Apparel 8.75%,

Manufacture of Food & Beverages 6.94%, Other

Service Activities: 6.20%, Hotels & Restaurant: 3.64%

MSME Sector India:Strengths


Strengths: MSME India3

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#MSME Contribution to INDIAN Economy

Contribution to GDP: 8%

Contribution to Manfacturing Sector: ~45%

Contribution to Exports: ~ 40%

#MSME Contribution to INDIAN Employment

Stats

MSME growing in double figures ensure millions of

job opportunities to the skilled & semi-skilled workforce

People Employed in MSMEs (2013-14): 1500Lakh +

In last 5 years 3500 Lakh+ people employed.

MSME Sector India:Weaknesses


Weaknesses: MSME India5

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#Lack of Funds

Current Credit Gap: ~63% (to be reduced tp 40% soon)

Banks & FIIs not so keen in financing MSMEs due to risk.

New methods of financing are either not known or are very new in country

#Lack of Management Skills

Home-grown units lack management skills, vision & outlook.

Poor accessibility to resources like: finance, technology, manpower

makes the MSMEs

Weaknesses: MSME India6

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#Access To New Technology

Technology plays an important role in MSMEs. They help automate and

lower the manpower requirements without much error.

Thus they ensure efficient & optimal growth.

MSME owners are either unawre or are not willing to use such technology.

#Internet Availability

As per a report publisehd by BCG in 2013, 90% of the Indian

compaines out of a sample size 750 had no acceess to internet.

Internet being a major factor in operation of a company in the current

business scenario, the lack or slow internet is a major setback.

MSME Sector India:Opportunities


Opportunities: MSME India8

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#Bilateral and Multilateral Trade Agreements

India is growing its allies for trade and commerce with the neighbourhood

coutries & globe.

#Enhanced Credit & Financial Support

INR 10000 crores fund has been announced for equity & soft loans.

INR 200 crores credit scheme for start-ups by those from SC & ST.

Alternative sources of finaning & funds are now invited to help the

indegeneous business set-ups - FDI, NBFCs to play a mjor role.

Opportunities: MSME India9

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#Support for Technology Upgradation

To promote more investments in Technology & Green Technology by MSMEs,

schemes like Technology Up-gradation Fund (TUF) / Credit Linked Capital Subsidy

Scheme (CLCSS) may be introduced for renewable energy, energy efficiency, waste

management, and other clean technology areas

#Marketing Assistance

Small business trade promotion meets, conferences, buyer-seller

meets, expos have been initiated.

Training in digital marketing have been initiated by GOI & NSIC

MSME Sector India:Threats


Threats: MSME India10

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#Low R&D

Most of the entrepreneurs try & capitalise the already exisiting activities, thus

bringing no R&D into play.

~70% of the MSMEs are in service sector. They are dependant on external

clients. Thus a recession or economic barrier can easily set a fall of the MSME

sector

#Lack of Support From Banks & FIIs

Small business funding from banks still remain a concern even after

multiple policy changes.

#Quality Concerns

Indian MSMEs are yet to match the international standards.

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