SMEs face market access and financial constraint to go global. This is where Information And Communication Technology (ICT) has played a major role, as a level playing field to one and all, who can creatively use the ICT strategies to reach the far areas of the globe.
SMEs in current scenario face limited access to risk / growth capital and resulting leveraging. They Operate in fragmented markets, and are vulnerable to market fluctuations, have limited access to technology and product innovations and also lack of awareness of global best practices.
The development of new entrepreneurs is critical to India’s growth and development.There has been a burst of entrepreneurship across the country, spanning rural, semi-urban and urban areas. Majority of the new entrepreneurs of today are still self-financed. There is a widely held perception among entrepreneurs that it is very difficult to get bank loans at the start-up stage while becoming comparatively easier at the growth stage. Perceptions regarding bank finance have not improved in case of entrepreneurs.
Some countries include retailing in its definition of SMEs along with manufacturing and services. Indian retailing is the second largest source of employment next to agriculture. Organized retailing accounts for just 3% of the total retail market and is projected to grow at 25-30 per cent a year. The untapped segment amounts to a whopping Rs. 9,800 billion (approx. $222 billion). India’s estimated total retail market to be around $202.6 billion and is expected to grow at a compounded 30% in the near future. Government is unlikely to announce any decision on allowing FDI in retail.
85% of SMEs in emerging markets suffer from credit constraints, 70% of all emerging-market SMEs do not use any formal credit, this means informal sector meets their financial requirements, though at times with stringent conditions, and nearly 23.7% of SMEs disappear in two years and nearly 52.7% of SMEs exit the market in four years due to business failure, bankruptcy, or other reasons.