Electronica Finance Limited (EFL), a part of the SRP Electronica Group, is one of the most diversified finance companies in India. Started in 1990, EFL was amongst one of the first few in the country to be registered as a Non-Banking Finance Company (NBFC) to provide loans for machinery purchase. With 33 offices across India, EFL now caters to a large product portfolio including business loans, working capital loans and industrial property loans in addition to its flagship product of machinery loans. In an interview with OEM Update, EFL’s Managing Director Ms. Shilpa Pophale gives an overview of the MSME finance sector in India. Edited excerpts:
What are the challenges MSMEs face in terms of financing?
Micro, small, and medium-sized enterprises (MSMEs) have gained increased attention in India in the last decade or so considering their strategic importance to the economy and the country. MSMEs further play a crucial role in generating employment opportunities. In spite of their tremendous contribution to the manufacturing sector, MSMEs in India face several challenges for financial assistance during various phases of their business cycle. Due to the issues like squeeze of working capital, lack of formal data for assessment, and lack of collateral free financing, bigger banks or financial institutions are not giving priority to MSMEs which act as an obstruction to the growth of MSMEs. Also, at times, they pay higher interest rates as the sector is considered risky.
How do you look at the Budget proposal on MSME financing?
The 2018-19 Budget has given a big thrust to MSME sector to boost employment and economic growth. Initiatives like support through capital and interest subsidy, budgetary support for MUDRA scheme, increased focus and allocation for food processing MSMEs and guidelines on use of GST data for ease of financing are expected to give a boost to MSMEs. Though the fine prints of these proposals are not clear, it is expected that the initiatives will give due impetus on MSME financing.
What’s your commitment to the MSMEs?
Incorporated in the year 1990, Electronica Finance Ltd. (EFL) is a pioneer in machinery finance for MSMEs in India with a vision of “Building MSME, Driving Economy”. We have serviced more than 7,500 customers over the last 2 decades.
Our MSME-centric business model has helped us to emerge as one of the leading NBFCs in this space with a pan-India presence. Also, because of our experience, we understand MSMEs much better than any other player in the market.
Based on this understanding, we provide loan services within 7 days based on cash flows, with no collateral. We design customise schemes with flexible repayment to match the customers’ cash flow without putting additional burden. MSMEs are generally proprietorship or partnership firms wherein an individual is managing the entire business. Considering this, we offer doorstep service with easy documentation, so that the MSME owner is free to focus on their business. We have also launched various customised products like: working capital demand loan, bill discounting, business loans, industrial property loans.
We have also recently launched a new business line to serve the non-manufacturing MSME sector by catering to their financial needs through innovative products.
Our MSME-centric business model has helped us to emerge as one of the leading NBFCs in this space with a pan-India presence.
Ms. Shilpa Pophale, Managing Director,
Electronica Finance Ltd.