Page 26 - MSME BULLETIN 2022 NEW LAYOUT 19082022.indd

MSME & START-UP BULLETIN, VOLUME 1, ISSUE 1, AUGUST 2022

selected products and sub-sectors. In case of expansion, fi nance through SME Exchange,
SMILE of SIDBI or some other fi nancing options like
iv. SIDBI Make in India Soft Loan fund for SME venture capital, etc., can be explored.
(SMILE): soft loan for new and existing units
in the form of quasi equity with maximum 3 years In case of decline, framework for revival &
moratorium. rehabilitation of MSME is the legal endowment
conferred under the provisions of the MSME
v. Performance & Credit rating scheme for micro Development Act 2006. This provides the timely &
& small units is implemented through NSIC and 75% workable solution to preserve the rights of bankers &
of the fee is fi nanced by Ministry of MSME. The main lenders and business to continue its operations without
objective of the scheme is to provide a trusted third break.
party opinion on the capabilities and creditworthiness
of the Micro & Small Enterprises (MSEs) so as to 4.00. Way Forward
create awareness amongst MSEs about the strengths Evolution is a continuous process and outcome
and weaknesses of their existing operations. evaluation is essential to evolve. Improvements can be
devised and adopted based on the feedback received
iv. Equipment fi nance up to 100% of the equipment in the evaluation process. This outcome evaluation in
cost from nationalised and commercial banks at easy the life of an MSME paves the way for expansion and
terms. moving to the next level as shown in the circle arrow
diagram below.
3.04. Maturity Stage
It is quite similar to human life. As one attains
the age of 40- 50 years, one starts getting social &
fi nancial stability in life. Now small loans or fi nances
are not required. Financial resources are suffi cient for
sustenance but for something big and to take some
quantum leap in profession, borrowing needs may
emerge.

In fact, very few MSMEs reach this stage and it is a
proud moment for an entrepreneur when his enterprise
grows in terms of its operation, number of employees,
revenue generation, profi t-making and wealth creation.
The requirement of capital also increases for expansion
or diversifi cation or takeover. These are the signals of
an MSME attaining the maturity.

At this phase of the business, only 2 fi nancing options This diagram shows that if a micro unit is
are available for expansion: successful, it gets upgraded into a small
unit and then small unit will become
1. Raising capital through Venture Fund or Angel medium scale enterprise, later on which
Investors can be converted into a large enterprise.
The difference between
2. Raising capital through Small & Medium
Enterprise Stock Exchange these four categories is that of magnitude.
So, if a micro unit is managed well it can
3.05. Expansion or Decline emerge as a large enterprise in due course
of time. Many success stories like Amul,
The decisions taken by an enterprise decide whether Nirma, etc., are visible.
it will expand or decline. If growth has been the driving
force, then defi nitely it will move towards expansion,
otherwise decline is inevitable. As life cannot be Cost Accountants have a vital role to play in
stagnant. the outcome evaluation as well as suggesting the

desired improvements to keep the trend rising. The
26 The Institute of Cost Accountants of India