I currently run two businesses which are MSME Registered and providing Goods & Services to Engineering & Manufacturing Industry. Based on the current definition of MSME we fall under Micro & Small of the MSME. Our customers are typically Larger Corporates, Multi Nationals, Banks, Public Sector Companies & Medium Sized MSMES.
MSMEs are the backbone of Indian Industrial Economy and they generate employment opportunities for Millions of People yet MSMEs face huge challenge and struggles in their day to day operations which are hardly recognised and supported.
Below I have compiled a list of burning issues which most of the MSMEs in my category currently experience & face on daily basis.
1. Generating Additional Funds for business Operational Exigencies – Banks do not support increasing Working Capital limits in the short run by considering bill discounting or confirmed Orders or Stocks or good performance – they insist on only bringing new collateral security for any business development or planned short term/log term growth.
2. Generating New Capital for Business Growth – Despite having technical skills & knowledge most Banks do not support Collateral Free Loans under CGTMSE Scheme even for a smaller loan of 15-20 Lakhs
3. Increased Payment Credit Days – Due to the liquidity crunch in the market the overall payment cycle has increased from the customers. In some cases upto the credit days have gone to 180 Days . It is high time MSME’s get support from Government for enforcing Shorter Payment Cycles for MSME Vendors.
4. Grievance Mechanism for Payment Defaults by Customers– Today if a registered vendor defaults payment or delays payment MSMEs don’t have a support mechanism in getting support to get payments. Legal recourse is an option but it involves lot of time and money and most MSMEs cannot afford that.
5. GST Refund Process – when every transactions is Online, verified & Validated – still there are manual processes enforced by Tax Offices for Refunds which is invariably leading to delay in Processing and there by creating room for subjectivity causing delays leading to business / financial constraints.
6. Lack of Recognition for MSME Registered Vendors – Currently there is not much recognition or support or Faster Processing for MSME Registered Vendors in Government Offices like Tax Offices, Excise Offices and Public Sector Companies.
The above list is not an exhaustive list but these are the burning issues from my experience over the last 7 years. The hardships which goes in running a Self Funded or Bank Supported Enterprise is countless and with focussed support from the Government in the areas of Capital , Cashflow and Reducing business complexities will help MSMEs thrive and succeed in their ventures.
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