Capt. Shaji Kumar

Tag: #MSME

  • SUCCESS AS AN ENTREPRENEUR – III

    The grass on the other side is always greener. Is it genuinely green or is it actually an illusion. I ventured out long time back, and can’t really say that it has turned green, even though like the salt and pepper hair that I have now, it does seem to be interspersed with some green. And mind you I have spent some 21 years tending to it. A lot of ex-employees who were at one point associated with me did jump into the sea of entrepreneurship. I am not aware of how they fared in their endeavor and whether for them it turned greener almost instantaneously. One thing is however very certain, those who feel that entrepreneurship is indeed a get-rich-quick scheme are headed for a disaster. I meet so many people who rattle out the road map, get funded, create valuation and bring out an IPO / get acquired and then walk away with tons and tons of money. A select few hit par dirt and which triggered this berserk stampede. That is why today we find that 90% of startups are failing. 

    Anyone who aspires to be an entrepreneur should have a innate desire to achieve success. And it has a long gestation time and the budding entrepreneur has to be prepared for the long waiting period during which the test would be severe and relentless. How does an Olympian win the Medal that he/she aspires for. There is no short cuts here.

    You need to have a vision, ascertain the “WHY” factor and start small. Let the light far off be burning even though dim from afar. If Birbal could find warmth from the candle burning miles away then surely you can keep the desire burning till you reach your goal. Mistakes, aplenty are inevitable. But with each mistake the resolve should keep getting stronger. Never give up in the face of adversity. The situation will change eventually. The fire in the belly should remain burning. Perseverance and willingness to work hard. If you choose to be an entrepreneur then you have to choose to sacrifice a lot of other things. 

    Your enterprise is your baby. Be proud of it. Never be dazzled with what is around you. A very senior person remarked to me recently about the location of my Office. It is my Office and I am proud of it. I am the “employer”, and if employees do not want to compromise and have their own locational preferences then it is their own restricted mindset and I cannot help it. Whoever heard of a well walking up to a thirsty person!! But then you can provide Value addition. 

    I have built a goodwill by practicing integrity and taking very good care of my Customers. And this has definitely resulted in a very positive retention of Customers with solid goodwill. The Customers should not stop believing in your Venture. Never take them for granted. You exist only because of them and it can never be the other way round. If our reputation and integrity exceeds expectation then Customers will be willing to be associated with you regardless of the cost. It will not matter if you are more expensive. 

    When you embarked on your entrepreneurial journey, was it a “risk” or a “gamble”. Just like success is never guaranteed, failure does not mean the end. Nothing is final. At one point, I went on to scale heights and in the very next year my business had plummeted. The slide could be stopped only recently and have again regained the upward momentum. Entrepreneurship has its flips and flops. Never be discouraged. If you do not give up, there is nothing that can stop you from succeeding…a true life story.      

  • “LOCKDOWN” ITS IMPACT ON MSME SECTOR.

    The entire World is presently in the grip of Covid-19 virus. It has been declared a pandemic, consequently fear bordering on paranoia has taken grip across the World. Consequently almost the entire World is in a state of Lockdown. The fear in the minds of people is so much that If you happen to venture out to purchase some daily essentials and happen to come across someone in the street, you are treated as if you are the manifestation of a walking virus in human form. However, historically looking back, the present condition is nowhere near the level of devastation that was inflicted by far more lethal epidemics in the past like the Spanish Flu or many such attacks by the “militant” virus community. Eventually in a few months time this Covid-19 threat would have been conquered successfully by our brilliant Scientists and eventually humankind will cope to co-exist as we have done with the mother of this present iteration, “Influenza”.

    What is more of a concern is not the medical pandemic of Covid-19, but the economic pandemic that is going to spell a much more vicious and lethal impact. Talking about India, it would be a huge challenge for the Government to bring the economy back on track and once again set it back in motion. Almost 40% of the current economy is supported by the MSME Sector. In fact most of the migrant workers who have fled from Cities are in some form employed by the MSME Sector. Even considering the fact that all goes well and we re-open for business post 15 April 2020, it is going to be a very tough challenge to get things going before the beginning of July/August 2020. And God forbid, if the present state of limbo were to extend to say May 20 / June 20 it will most definitely be catastrophic.

    As a MSME Business Owner, I certainly do not want the situation to come to a point where I have to “lay-off” people or be in no position to continue to pay salaries. However, so far apart from Office Orders there has been no concrete plans for recovery announced by the Government. The Government has only stipulated by way of series of office orders that “No employee” should be retrenched” or that “full Wages” need to be paid etc. But HOW? This is the big question that needs to be addressed. And the solution has to be given by the Government. Most of the Business owners in the MSME have very limited or absolutely no “cash reserve” unlike its more affluent and well established counterparts. Under the current circumstances, It is feared that MSMEs—the key pillar of the Indian economy and the second largest provider of jobs—will no longer enjoy the same status post COVID-19 once the Lockdown ends. The pandemic has posed an existential crisis for the MSMEs. What choice does a business owner have?

    The Reserve Bank of India, in a recent announcement of three-month moratorium on payment of instalments of term loan outstanding, deferring of interest rate on working capital and also not considering the deferment for NPA is expected to benefit a lot of MSME borrowers. The RBI’s measures are estimated to inject Rs 374 crore liquidity in the economy. This has come in as a relief but there is a lot more that needs to be done. What the Government has to consider is that the MSME sector contributes significantly towards the GDP. If this sector were to be crippled the entire economy will indeed slip back by 21 years as announced by our Honourable Prime Minister.

    It is time that the government announces and implements schemes to provide specific relief measures to the small businesses, which are amongst the worst hit. The need to working capital and cash flow lending both without any need for collateral, is more pronounced during these times than ever before. We completely understand that India unlike the other more affluent Countries may not be able to support the Industry financially by announcing direct aid packages. However, what can be very easily done is to provide “working Capital Loans” at a marginal Interest with a moratorium of 6 months to 12 months.

    It is time that the Government and intelligentsia domain experts and stakeholders from banking, financial services, think tanks, policymakers, industry, chartered accountants, consultants and economists get down to the task of charting out a specific plan to resuscitate the MSME, rather than allow it to die of asphyxiation. Like the dilemma of the Prince of Denmark in Shakespeare’s play, the question is not if the Lockdown ends or gets extended, the support and firm hand-holding by the Government would be a mandatory requirement to pull the economy out of this quagmire.

  • MSME’s : Wither to?

    India houses more than 63 million MSME’s contributing 29 percent of the GDP, 45 percent of Industrial Production, providing employment to millions of Indians. However, it has always been beset by inherent issues which unfortunately has largely remained unattended to. Despite a dedicated Ministry setup by the Government there still remains a huge gap between the cup and the lip. The most unique challenge that MSME’s endure is access to low cost capital. This despite having dedicated channels like SIDBI in existence. Authenticated reports estimates that the credit gap for MSME’s stand at approximately INR 15 lakh crore. And with the advent of technological advances, initiatives like GST and the formalization of the economy, the back of this sector is already at a capacity stretch. Only 20 percent of the MSME’s are being financed by the formal banking system, that leaves the rest 80 percent to scrounge for “finances” from the informal sector at atrocious rates of interest. This lack of adequate access to timely and affordable credit continues to remain one of the sector’s biggest challenges, restricting its growth and future potential. There has been some initiatives led by the Government like the 59-minute loan, co-organisation between banks and NBFC’s for affordable credit, however despite these initiatives being laudable at a macro level, it still leave a huge gap at the micro level, as it does not translate into anything.

     

    The dream of growth and pushing the GDP to get to 5 trillion, with a budding young India and initiatives like start-up India, pushing the young Indians to explore avenues of entrepreneurship & self-employment, the Government needs to step up its act and ensure that the hand holding translates to grass root level. The hand holding has to be more visible. There is no other way around the crisis of employment, and it is only logical to push entrepreneurship and self-employment. The large businesses may only contribute just as much to this 5 trillion target, than the 30 percent sector which can be pushed to clamour and contribute as much as possible – and it can. This is the only way that a young vibrant India having 70 percent of able bodied under thirty raring to go population can take us to the finish line.