Annual SME Survey 2013-14


A nationwide survey of micro, small and medium industries was conducted over a nine month period covering twenty six states and 3,30,000 MSMEs across the country. The survey was instituted by the India SME Forum and executed by SDRC India Advisors, from amongst the verified database of the India SME Forum, the attendees of its nationwide programs and its members. The survey was undertaken to undertaken to understand the issues of MSMEs as well as to understand key positive steps in the Indian Ecosystem & MSME Development. It was also in this spirit that, it was decided to Institute the India's Best Intermediaries for SMEs, on the basis of the responses from respondents. Of these respondents only 54968 fully answered the questionnaire, with 1,07,901 leaving more than 50% of the questionnaire incomplete due to respondent unavailability (call drops / disconnecting the call/ repeatedly not answering the call back) and the balance 79,131 refusing to answer more than 70% of the questions. For purposes of this survey, data from only the fully answered questionnaires is being tabulated and presented. 68.5% of these respondents were micro industries, 27.75% were small industries, and 3.75% were medium industries as per the classification by the Ministry of MSME, Government of India.Of the 54,968 respondents 73% were manufacturing companies 21% were services companies and the remaining 6% were both manufacturers and service providers.

Financial Ecosystem

61% or 35,530 of the respondents had either applied for loans. 4% or 2,198 respondents had no requirement of a loan and the remaining 35% or 19,240 respondents didn't have knowledge of any loans that they could avail as a priority sector and hence haven't approached any financial intermediary.

Of the respondents who applied only 2,345 or 6.6% of them actually received/availed loans. 12.5% or 4,441 of the people applied for the loan still had their application under consideration. 13,821 or 38.9% of the respondents had applied but had their applications rejected for various reasons. 14,923 or 42% had no idea of the status of the application. The highest loan availed by respondents who received the loans was Rs 30.50cr and the lowest was Rs 2.0 Lakhs. The average loan size was 42.75 Lakhs. Of the 2,432 respondents who received loans 92.5% were manufacturers with the balance being service providers.

Of the 2,432 respondents who availed loans, only 14% were aware of the collateral free lending policy. 88.5% of the loans had been availed from public sector banks with another 11% from NBFC's and the balance from Micro Finance institutions 74% of all respondents polled did not know about central government or state government subsidies / incentives / schemes. 68% of all respondents polled did not know about collateral free lending, proposed by the RBI to PSU banks, under CGTSME. 4% of the respondents are aware of equity raising options through venture/seed/private equity and 0.25% are aware of SME exchanges but 96% of the respondents who are aware of all the equity raising options are skeptical of diluting their stake.

The National Entrepreneurial Ecosystem

The biggest problem for MSME's in India cited by respondents was accessibility to funding. 64% of respondents polled accessibility to funds as the biggest issue faced by them, followed by Irrational Direct and Indirect Taxation which polled 57%. Power and Infrastructure polled a 41% as the third biggest issue faced by MSME's with Permits and Regulations ranked a close fourth, having polled 38%. Incubating and Difficulties in Starting a Business came a distant fifth, having polled 28%.

The State Entrepreneurial Ecosystem

In terms of ease of starting or doing business in a state, Tamil Nadu topped the survey with 92% of the respondents, polled from the state, being extremely satisfied with the policies, infrastructure, benefits and incentives. Gujarat came in a close second with 91.75% of the respondents from the state giving it a thumbs up followed by Maharashtra with a distant 69%, Haryana with a 64%, Madhya Pradesh with a 62% and Karnataka with a 51%.

State of the MSME Business

Nationwide 58% of the MSME's polled, were doing far better than last year in terms of turnover and profitability. 24% were doing marginally better than last year and 18% were doing worse than last year. 61% of the respondents polled had employed new staff this year, with a 19% with no change in number of employees from last year and a sizeable 20% having reduced the workforce.

MSME : Use of Technology

16% of the respondents were already using technology to run and/or promote their businesses. 63% of the respondents polled, were aware of the benefits of technology and planned to use it in the future. 11% of the respondents were unaware of the benefits of technology and hence did not have a plan to use it.

2% of the respondents polled were already using cloud based technologies which were easier to start and cheaper to run. 46% were aware about cloud computing but were not using it while the remaining 52% were unaware.11% of the respondents currently use social media through their smart phones and 2.7% use social media to promote their goods or services.

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