An emerging threat to small Enterprises (MSMEs)

An emerging threat to small Enterprises (MSMEs)

-Micro, small and medium-sized enterprises ( MSMEs) face an identity threat due to economic recession in the financial year (FY) 2021 in the midst of the Covid-19 pandemic.

-India was moving towards a 15-percent decline in revenue and a 25-percent decrease in earnings before interest, taxes. fortunately, for smaller firms, revenue will also fall by 17-21 percent, while the EBITDA margin would fall by 200-300 basis points ( bps) to 4-5 percent, with weak demand away from lower commodity prices.

-The downward trend at the operational level will also have an impact on creditworthiness. In the meantime, the average interest rate coverage ratio could fall to 1-1.5 times the 2.4-fold between the 2017 and 2020 fiscal years, “the study said.

As a summary to this issue, a three-pronged strategy is now crucial

-Improve job satisfaction with formal and informal employees to confident decisions.

-Speed up the execution of the Rs 3-Lakh Crore Aatmanirbhar scheme to ensure the continuous supply of liquidity to small and medium-sized enterprises.

-Lenders must go further than traditional credit processes because they have a key role to play in recovering.


Rajput Jain & Associates

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