Make In India has attracted a lot of attention from younger generation of entrepreneurs. They do not want to join family-owned traditionally-run businesses. They are globally connected and well aware, says Chief Mentor and CEO Global Network Jagat Shah during his road trip to Coimbatore as part of Mentor of Road programme. Mentor on Road is a unique initiative to mentor the rural enterprises, start-ups & Micro, Small, Medium Enterprises (SMEs) in India & across 20 countries in various functional areas of business such as Marketing, Finance, Production, IPR, innovation, R&D and HR. NEWS MSME Editor Anup Kumar Sinha spoke to Jagat Shah on his experiences so far. Excerpts:
Mentor on Road has now completed almost three weeks. What have been your experiences so far?
The sentiment is positive. A year back, the SMEs were not looking up. Now at least, they are not sounding low. There has been a positive response to initiatives that the Government has taken. It seems that the government is moving in right direction. Now speed is the question.
The Government has taken initiatives like Make in India. Such initiatives aim to make SMEs manufacturing powerhouses.
During my interactions, I have presented them models where SMEs in India can have joint venture partners from abroad. Overall, SMEs in India lack technology and if through joint ventures they could bring in technology and manufacture here, then over a period of time the same joint venture companies would start exporting. I have given them live examples from some companies in Gujarat who have done this successfully. If it can happen in Gujarat, it can happen in other states also.
Secondly, I have addressed the trading communities too. Trading companies have been selling so many products and have a well networked market. My advice to them is to pick up just one product they trade in and start manufacturing. Since they have a sales network already in place, they can earn both ways. This has appealed the trading community very well, especially the youth. Younger generation does not want to join traditionally-run businesses. Taking a Make in India approach, they are quite excited to join the business.
Government has focused on African market.
The next 20 years belong to Africa. Over 45 per cent of Indian exports come from SMEs. I have been saying that SMEs can focus of technology export and also on product export to African countries. This has also generated a lot of interests in youngsters as they are globally connected. The moment we talk about exports they become inquisitive.
Main pain-points of SMEs that have emerged so far..
The main problem is of banking. Large companies default on large sums amounting in crores but nothing happens to them. Yet, they get a lot of banking support. SMEs have very low default rate but they take a long time in getting loans with so much of documentation and collateral. There have been schemes like Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for providing no-collateral loans up to one crore but practically no one follows that. What is the use of such a scheme, they ask.
Bank interest rate is another big challenge. In China, the interest rate is around four per cent. We can’t compete with them with such high interest rates here.
Similarly on technology front, a lot of time is eaten up in Government liaison work. Almost 30 per cent of time gets wasted in such work leaving a little time for focusing on hunt for technology or even market properly. So there should some mechanism for hunting the technology for SMEs as is the wont in countries around the world.
women entrepreneurs compared to their male counterparts have come up with many innovative ideas in sectors like food processing
Any buy-in on initiatives like MUDRA
At the moment, there is not much awareness on this. When i present them the details as Funding of the Unfunded in our interactions, they do get excited about this. This seems to be going in right direction. How fast it can be operational is matter to be seen. One person in Nasik expressed his apprehension that it should not become just another scheme like CGTMSE.
Response from women entrepreneurs..
The response is positive. I am surprised to see that participation of women entrepreneur have gone up manifold in my sessions compared to last few years. I have been given them example of Women Industrial Park set up by the Government in Ahmedabad. The women entrepreneurs have shown keen interest in visiting the park and pursue the governments in their respective states to replicate the same.
In Madurai, a group of women entrepreneurs came forward to share that they want to organize Vibrant Madurai based on successful brands like Vibrant Gujarat to create a robust platform for manufacturing sector. At present, they are mostly in trading. In fact, women entrepreneurs compared to their male counterparts have come up with many innovative ideas in sectors like food processing, etc.