MEASURES TO BE TAKEN BY SME’S/MSME’S TO AVOID NPA

MEASURES TO BE TAKEN BY SME’S/MSME’S TO AVOIDE NPA

Many of SMEs and MSMEs essentially fail scale up due hiring nonqualified management who cannot run the enterprise. As this role plays a prominent role so should be taken up by choice by the owners in the capacity of owner managers.

SMEs/MSMEs primarily fail due to lack of management skills and systems.

At the end of the day they end up increasing the NPAs of banks and financial institutions and eventually destroying the track record of the policy makers.

They actually need “interventionist” business development consultants who identity the requirements of the systems and will act as helping hand in their operations still the business stand by its own.

 The entrepreneurs of small organizations fail to recognize this need at the initial stage of their business since they think operations or general management is very general.

  • The failure rate of these organizations cannot come down unless policy makers or institutions engaged with funding these organisations or granting license. As the cost this engagement is very low when compared to cost of failure so it can be borne by them.
  • Even though some institutions like IIM and others have been engaged by the Government to develop skills or facilitate them, what they need is someone who is available to them on the ground steadily day to day through the growth stage and this link has been missing.
  • This kind of services can be made available by professionals with academic qualification and experience of running/ consulting SMEs if a certain minimum number of clients are assured to these interventionist consultants.

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