MSME loans: Getting loans is a tough application for most MSMEs: Ravi Venkatesan from GAME

BENAGLURU: Most small and medium-sized businesses in India find it difficult to obtain loans because they are first-time borrowers financially excluded from the formal banking system, said Ravi Venkatesan, chairman of the Global Alliance for Entrepreneurship. mass (GAME), which functions as an industrial body for micro, small and medium enterprises (MSMEs).

Venkatesan said most small businesses are still “confused” about recent government stimulus measures for the sector, such as the Rs 3 lakh-crore unsecured loans and the Rs 10,000 core fund of funds. for the injection of capital into MSMEs.

“There is definitely confusion – this is the kind of general message we get from small and medium businesses. The issue of channels (for disbursements) is extremely important and the guidelines are not yet fleshed out, ”said Venkatesan, adding that“ the vast majority of them are still in times of drought ”.

GAME, which highlighted the challenges MSMEs face in 5 states, said many small and medium-sized businesses are not planning to relaunch their businesses.

“Overall, I still think the realistic scenario is that a very large number of businesses don’t reopen. A big part of our goal is to understand how we can emerge a new generation of businesses, ”said Venkatesan.

On Tuesday, the All India Manufacturers’ Organization (AIMO) said nearly 35% of MSMEs and 37% of self-employed workers in India started going out of business because they see no prospect of recovery after the Covid lockdown. 19 pandemic.

In an investigative report released on Thursday, AIMO said more than 70% of MSMEs would downsize. The extent of the job losses would be clearer by the end of August, as most MSMEs are still unsure whether their workers will return, he said.

“In general, there is a great feeling of openness (on the part of the government) as they realize that they do not have all the answers. Much of the action is taking place at state and local level, ”said Venkatesan, adding that the Center“ has a big role to play ”.

“Stimulus, the reclassification of the MSME segment, these are important elements. But at the end of the day, what matters is what happens on the ground – how the money actually flows to MSMEs. One of the biggest challenges is how to improve the ease of doing business… ”

Some small entrepreneurs, according to GAME, are hoping to bounce back in four months, although they anticipate many challenges when it reopens.

“Many companies with a disproportionate share of migrant workers would struggle to meet their demand. There are more questions than answers now. People who have left the city are very traumatized, many of them may wonder if city life is worth it. It’s also possible that some of them will come back, ”Venkatesan said.

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