Most micro businesses are simply unable to grow and become small enterprises in India. Is lack of awareness a reason and how could this be corrected?
Earlier this year D&B released a very interesting analysis of the MSME sector. Titled “The Missing Middle”, the analysis highlighted that compared to developed countries such as the US, Canada and Australia, there is an alarming lack of small and medium enterprises in India.
India had only 5-small medium and large enterprises for every 95 micro businesses, while developed countries, feature around 50 micro entities, and 40 small-to-medium companies in the same sample size.
So, what is keeping Indian MSMEs small?
While the analysis reveals that the intent to grow is always there, it cites the lack of access to formal sources of finance, unavailability of infrastructure, power and skilled labor as the key factors.
As per the report, only 4 percent of MSMEs have access to a formal source of finance, whereas the number in a country like Vietnam is 37 percent. This is a surprising statistic given the vast number of government credit schemes and the wide publicity given to them.
Governments, International Organizations and Large companies spend billions of dollars each year to provide schemes for the benefit of small and medium sized businesses. However, SMEs in India seem to have a poor level of awareness of the national and international opportunities that are open for them. This could be a key reason as to why many of them do not utilize the very schemes that are designed for their benefit.
This assumption is backed by many earlier reports. The “Opportunity Awareness Gap” was highlighted earlier this year by the then Union Minister of Commerce & Industry, Suresh Prabhu while speaking about the India – Russia Investment pact.
The concerns highlighted by MSMEs in various surveys included the lack of awareness for various government schemes. If there are awareness issues for government schemes, then it can be safely assumed that corporate and international schemes for this sector have even lower visibility. Clearly there is something missing in creating the last mile awareness for schemes that can benefit the MSMEs.
What could be the reasons behind the lack of awareness?
Government schemes are often managed by multiple departments and have different implementing agencies. They might not have a large budget for publicity and stake holder engagement. The application procedures may not be very user friendly and the timelines could be unpredictable.
Another key reason behind the lack of awareness could be that MSME owners are severely time and resource constrained. They do not have the bandwidth to find out and evaluate the schemes and follow up on the applications.
Creating tools that can update them in real time about relevant schemes is the need of the hour. Such tools should be easy to use, should work on smartphones and capable of communicating through SMS and WhatsApp for the best impact. An option for MSMEs to seek help in applying to these schemes could further ramp up their utilization.
Could the ideal solution be found online?
A solution to the awareness gap has been recently launched. Known as the Scheme Finder, it is a free online tool that provides real time, tailored info on government and private schemes, special procurement, subsidies and free offers.
The Scheme Finder tool makes the “Opportunity Awareness Gap” a thing of the past. Once an SME registers with Scheme Finder, it automatically informs the SME in real time about various government and private offers that match the company’s profile and business goals. SMEs can also seek help to apply to the schemes.
The scheme finder uses latest government scheme data and thousands of national and international announcements of programs for SMEs. It also allows scheme providers to directly register their special offers for SMEs. All SMEs need to do is to register and enter in a few relevant business details for the Scheme Finder to get activated.
SMEs can use the Scheme Finder tool to get information on opportunities to decrease their debt costs, save on expenses, win new business and increase productivity. They can register for Scheme Finder at: https://www.smemaxx.com/scheme-finder
There is clearly a big gap to be overcome in helping busy business owners discover schemes designed to help them grow. With the Scheme Finder, it is possible to deliver every government and private opportunity to their inbox.