As per market study, nine out of ten enterprises in India at the moment are small to medium sized. Accounting for the largest chunk in the Indian industrial sector, these SMEs play a crucial part in generating both revenue and employment. Naturally, the Indian government has put it on their agenda to encourage entrepreneurship among the youth and boost the growth of such businesses.
To this goal, the legislature has launched initiatives like Make in India, Start Up India, and a string of various business loan schemes. However, despite such initiatives, the struggles of SMEs in the country are still far from ending. In this article, we have discussed the three major roadblocks to Indian SMEs in 2022.
1. Access to Adequate Credit
B2B financing tops the list of troubles for SMEs in India. The lack of easily accessible, timely credit has curbed the growth of many potential ventures. Banks often see a risk factor in sanctioning business loans to SMEs for reasons like the latter’s lack of sufficient collateral or adequate paperwork for the same.
Fortunately, B2B lending for such ventures has now been made easy by the expansion of the alternative lending landscape in the country. Many NBFCs cater specially to the funding needs of SMEs who are either ineligible or for some reason, unable to secure business loans from banks. Some even provide flexibility in loan terms and interest rates subject to the applicant’s financial standing.
2. Adapting to Advancements in FinTech
As more startups are joining the small business league everyday, it is becoming crucial for businesses to adopt the latest digital technology to sustain in the increasingly saturating market. Some estimates suggest that the rate of digitalisation in the Indian SME sector stands at a disappointing 20%.
Most SMEs either do not know when and how to begin the digitalisation process, or they lack the capital required for the same. Many online B2B payments platforms in India provide necessary technological assistance to their clients, besides B2B financing, to help their small businesses reap the benefits of advancements in FinTech.
3. Lack of Skilled Workforce
Most SMEs are unable to function at their full potential due to lack of adequately skilled personnel. This problem is even more acute in small businesses operating in rural India. The lack of skilled labour impacts every step of the production process- adoption of modern technology becomes difficult, deteriorating the quality of the end product.
Availing the B2B lending services of online NBFCs is the simplest solution to the skilled labour crisis among SMEs. Their supply of capital is easy and timely, and can provide SME owners with the required funding to focus on industry training and skill development of their workforce.
Takeaway
Working on improvements on these three fronts can go a long way in enabling the growth of SMEs in the country. Since lack of funding is at the crux of most of their troubles, alternative B2B financing from NBFCs is the easiest solution.
EMBIFI is a trusted online B2B lending, financing, checkouts and payments company. It is the best suited platform for Indian SMEs seeking easy supply of capital. To know how their offerings can help your business, get in touch with team Embifi.
