MSMEs struggling due to lack of working capital funds: AP Chambers
Working capital finance is an important aspect of any venture, more so for the fledgling MSME businesses. As the Indian economy is largely MSME driven with this sector contributing upwards of 30% to the economy both in GDP and employment generation, it is highly incumbent upon all stakeholders to facilitate an easy and adequate flow of credit to this sector. The sector is presently highly constrained by the lack of availability of adequate financing options.
To highlight the prevailing issue that is affecting MSMEs, AP Chambers in association with HDFC Bank has today organized an interactive meeting, “Managing Working Capital Funds Efficiently” at AP Chambers’ Hall, Vijayawada here on Wednesday.
Speaking at the meeting, AP Chambers’ President-elect Mr. Potluri Bhaskara Rao said, “Almost 99% of the units in Andhra Pradesh come under the MSME category. MSME sector is the worst-hit sector on account of the economic recession in 2018, the COVID pandemic, the Russia-Ukraine war, and the exponential rise in production costs and high labour costs have added to the woes of MSMEs. Even though the Central government announced many schemes for MSMEs during the pandemic, MSMEs are still finding it difficult to avail credit facilities from the banks.
Stating further Mr. Rao said “the credit ratings of MSMEs are affected as outstanding dues owed to MSMEs to the extent of around 400,000 crores from the Central and State governments, PSUs and corporates are pending despite provisions under MSME Act 2006. Similarly, the reimbursements, grants, subsidies announced for the sector are yet to be released. All these factors have put a lot of pressure on the working capital funds of MSMEs.” He added that bankers have to come forward and extend credit facilities to MSMEs and provide much-needed financial support to MSMEs.
HDFC Bank Officials from Emerging Enterprises Group, Zonal Head Mr. Medari Madhusudhan, Regional Credit Head Mr. Amol Kshirsagar, Regional Head Mr. Rajasekhar Nagri, Branch Manager (One Town) Mr. Jagadeesh Karagana elaborated on the various finance facilities offered by it for MSMEs and later they interacted with the Chambers’ members to clarify the doubts raised by them. A large number of participants attended the meeting and benefitted from the session.
AP Chambers’ General Secretary Mr. B. Raja Sekhar said that in view of the difficulty faced by MSMEs in availing credit facilities, AP Chambers has thought of connecting its members who are mostly MSMEs with one of the premier banks such as HDFC Bank as it is the leading provider of credit facilities to MSMEs.