Limited MSMEs gains from schemes

Survey finds 68% not benefited from specific measures

Funding remains the biggest challenge for micro, small and medium enterprises (MSMEs) despite the government announcing several measures to address the financial crisis faced by them. The majority of units has not benefitted from the various schemes in the last

12 months, finds a survey. The government has in

2020 introduced various measures to enhance credit access to startups and MSMEs under schemes like Startup India, MSME Samadhan, no or low interest loans, Make in India and Aatmanirbhar Bharat. However, in an annual survey of startups and

MSMEs conducted by Local Circles, only 21 per cent said they have benefitted from the government schemes while 68 per cent said they have not. The share of respondents who said they have not received any benefits has gone up from 50 per cent in last year's survey to 68 per cent this time.

Raising funds and loans continues to be the biggest challenge for MSMEs. Finding growth is the second big challenge for almost 25 per cent respondents while it was just 10 per cent in last survey. Survival of the business continues to be the third major challenge. The survey received over 20,000 responses from more than 8,000 startups and MSMEs.

"MSMEs need to be qualified for the schemes. Access to loans has never been easy...But ECLGS (emergency credit line guarantee scheme) has disbursed Rs 2 lakh crore during the pandemic times. More and more buyers are being pushed on TReDS (trade receivables discounting system) platforms helping MSME to finance receivables. So while the market conditions are yet to be fully conducive for growth, the legacy issues continue to bog MSMEs down. In normal circumstances too barely 15 per cent MSMEs have access to loans from banks," said Anil Bhardwaj, secretary general, Federation of Indian MSMEs (Fisme).

The survey further found that only 31 per cent respondents have more than three months of cash. About 10 per cent said they had cash for more than six months and 18 per cent maintained they were out of funds. This is a vast improvement from the mid-June survey that had indicated only 16 per cent had cash to survive for more than three months while 42 were already out of funds.