Coimbatore SMEs experience high yields of e-marketing

July 14th, 2010
Author : Biz2Credit Advisor

Coimbatore has become a hot bed of e-marketing. The adoption of internet based marketing has resulted in rise of job orders from overseas customers. Coimbatore has more than 50,000 SMEs, and this initiative has reduced marketing costs and increased international job orders.

The Tamil Nadu Association of Cottage and Micro Enterprises (TACT) disclosed that 15 percent of units in Coimbatore are having their own websites. The major industry types that Coimbatore houses are engineering, automotive components, textile machinery and pumps. Industries in Coimbatore have recorded 10 -15 percent increase in job orders from abroad. J. James, president of TACT, says, “What we thought would be a cost-cutting measure — adoption of e-marketing — has yielded more profits.”

K Raja, in December 2009, started a website for his engineering unit in Coimbatore and for the first time secured a job order from a German customer this year. He comments that by building links and creating valuable content help to gain traffic. Then M Saravanakumar, the owner of a Coimbatore-based Auto Engineering Works company, has 40 % orders from overseas customers. He says that, ‘profit margins in the domestic market were a fraction of those on foreign orders’. He recently purchased five new machines worth Rs 26 lakh each for his unit.

E-marketing can help SMEs perform efficiently in the global market. The reason is it gives SMEs global reach, makes lower cost interactive campaigns that brings measurable results and improves upon organizations’ marketing goals.

How Credit Ratings Can Help SMEs to Increase Access to Credit

July 6th, 2010
Author : Biz2Credit Advisor

Most of the SMEs lack proper financial reporting systems leading to non availability of credit from banks. Credit ratings which can be defined as assessment of credit worthiness of the business based on industry comparables as well as non quantitative variables can benefit both parties by coming up with uniform standards. Credit ratings help financial institutions to get an insight of the strengths and weaknesses of an SME making it possible for them to take a quick-decision.

The ratings track record in India is not very encouraging as many small firms depend more on the advice of brokers and recommendations of others whom they consider to be experts. Even large corporate get credit ratings done as the regulators like SEBI have made in mandatory for publicly listed companies in order to access debt financing. Only in recent past adoption of international standards like Basel II has made it mandatory for any business having an exposure of Rs. 5 crs plus to get credit rated. This has lead to an increased trend in credit ratings among large and medium size corporate.

The credit-rating of SMEs is determined by balance sheet size, sales turnover, growth trends and credit limits enjoyed by them.

The credit concerns have led to more interaction between SMEs and banks on this issue. The concerns of credit professionals can be summarized as under:

  • The need to establish a “credit risk differentiation process” whereby it becomes possible for financial institutions to evaluate credit risk involved in a small, medium and large SME segment so that they can increase the lending to such business segments.
  • Low rated SMEs to be differentiated into a different pool altogether and then funding them accordingly based on some parameterized schemes.
  • Development of modules that can be used to conduct credit quality tests of banks and asset quality tests of SMEs.
  • Empower front end credit managers to take decisions of credit delivery in order to speed up the process.
  • To develop robust internal policies on SME lending so that the conceptual framework is kept free from ambiguities. SME need to be financed more based on their ‘business and revenue’ models and less based on collaterals.

SMEs play a very significant role in the growing Indian economy. There are around 13.6 million SMEs in India that contribute to over 45% of the industrial output. With consistent growth in bank credit, SMEs are more optimistic and starting to increasingly adopt credit ratings.

Norms for SME listing announced

May 24th, 2010
Author : Biz2Credit Advisor

  Securities and Exchange Board of India (Sebi) today announced conditions for listing on the SME (small and medium enterprise) exchange, reports Biz2Credit. As part of the plan a model SME equity listing agreement for the purpose was also announced.

 SEBI stated that the SMEs need not send full annual report to investors and can submit half-yearly financial results in place of quarterly results. It will also allow SMEs to put their financial results on website and do away with publishing the same.

 In November 2009, Sebi had allowed existing stock exchanges to set up a separate trading platform and relaxed the criteria for their listings. As per Sebi norms, only those company’s whose paid-up equity was maximum Rs 25 crore were eligible to list here. If the paid-up capital of a company rises above Rs 25 crore after the issue, they will not be eligible for using the SME platform.Sebi had also mandated that the companies will have to come out with issues with a minimum size of Rs one lakh.

Increasing Adoption of Credit Ratings by SMEs

May 17th, 2010
Author : Biz2Credit Advisor

National Small Industries Corporation (NSIC) aims at providing credit rating to over 9,000 micro and small enterprises in 2010-11 with the help of leading agencies like SMERA, ICRA etc.
The rating of the company’s financial health helps them get access to credit quicker and cheaper. It also helps in enhancing their acceptability in the market. In last 6 months all the major rating agencies have seen a big up tick in their SME ratings business as the SMEs get more mature, rating adoption will go up manifold times

The MSME sector, which was hit-hard due to the recent global financial meltdown, contributes eight per cent to the country’s Gross Domestic Product, besides 45 per cent of manufactured output and 40 per cent of exports. The Ministry estimates that there are over 2.6 crores MSMEs units employing over 6 crore people in the country.

FIEO looks for fiscal and non-fiscal support from FM

June 12th, 2009
Author : Biz2Credit Advisor

The Federation of Indian Export Organizations (FIEO) is looking for fiscal and non-fiscal support from the Finance Ministry, especially for export markets, which have suffered the most during the global economic crisis. The association wants to increase the sector’s competitiveness at a global level while helping SMEs recover from losses and regain confidence.
The talking points of the President of FIEO A. Sakthivel with the Commerce Minister are detailed at

Small Business News    

Neo Liberal Policies possible solution for MSMEs’ Downturn

2010-07-28 01:34:09

With economies of Europe and US are hard-hit by recession, SMEs in India has also witnessed decline in the last three quarters of 2008. The strong linkage with agricultural sector is one reason for micro, small and medium enterprises’’ (MSMEs) economic recession. But it would...

Udyami Helpline: To provide free information to entrepreneurs

2010-07-27 01:39:39

A new national level call-centre, named Udayami Helpline is about to be launched to help entrepreneurs of the country seek information and to redress their grievances. The call centre is given a single window model with a single toll-free number to serve entrepreneurs in India. U...

Monthly Newsletter

Name:

Email: