MSME’s are the backbone of Indian economy; they employ people and also provide much needed training to these semi skilled labourers. These MSME’s face problems unable to rectify is where it leads to closure of these MSME’s.
The problems faced are
Banking facility: Though government has lot of initiatives rolled out for MSME’s industry but unable to utilize the right scheme and at the right place plays vital role in non availability of finance for MSME’s which leads to closure of the company
Capital knowledge: The other major problem is un able to plan when capital is required as there is no process of demand and supply at the Macro and Micro level. These MSME’s need for capital comes with orders they need to fulfill which is not planned and as such when there is order non-availability of funds plays vital role. The founders go in for loan from market at heavier percentages of interest and do not keep the time line gap for realization of funds after delivering the order, which also plays vital role in eroding of the capital and reserves.
Investment on Technology: In today’s world technology is drastically changing leading to better manufacturing and reducing the cost, the MSME’s do not change technology based on production module but keep using the same technology and profits earned are not invested back to technology. When the situation arises is where the planning starts in MSME’s, which are biggest, hurdle.