Timely and affordable credit-only panacea for SMEs sickness: Study

By admin November 23, 2012 6:52 am IST

Nearly 25 per cent of SME units have either closed their shutters or are struggling for survival due to expensive credit, non-availability of timely and adequate funds, increasing power shortages to the extent of 35 per cent and delayed payments by large companies, according to the survey conducted by the Associated Chambers of Commerce & Industry of India (Assocham).
Payment delays by corporations raise the transaction cost of small and a medium enterprise (SMEs), which eventually bring these to the verge of sickness, pointed out the Assocham survey on “Spreading sickness in SME Sector”.
The survey reveals that the most important reason for sickness in the sector is the absence of time bound programme for credit dispensation, (reported by 71 per cent of sick units), shortage of working capital (48 per cent), marketing problems (44 per cent), power shortage (21 per cent), non-availability of raw material (15 per cent), equipment problems (10 per cent), labour problems (7 per cent) and management problems (5 per cent).

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