2011-01-18

Interest rates hit MSMEs

Confidence of the Micro, Small and Medium, Enterprises (MSMEs) about their business outlook for the January - March quarter has slipped, on fear of rising input costs and interest rates in the coming

Interest rates hit MSMEs

Confidence of the Micro, Small and Medium, Enterprises (MSMEs) about their business outlook for the January - March quarter has slipped, on fear of rising input costs and interest rates in the coming months, according to a new survey conducted by the Confederation of Indian Industries (CII).

The CII MSME survey, which shows the confidence index slipping 1.8 points to 65.2 points from 67 points for the previous quarter October-December 2010, says, "Persistent and high inflation is going to adversely affect the raw materials and other commodities that are to be used by MSMEs. Additional impact would be that the increasing input costs are also going to eat into the net profit margins of MSMEs."  

The survey adds that interest rates are also expected to stiffen up in the coming quarter, which is going to adversely affect the credit cost and the credit availability for proposed/planned capacity expansion of the MSMEs.

In addition, the survey reveals that the MSMEs are concerned over credit cost and credit availability for working capital during the current quarter. Also, Inventory levels have shown a decline of 5.5 points against the previous quarter, with the current value being 55.2 points. Surprisingly, however, the survey shows that MSME units are optimistic about their gross sales for the January - March period, which, according to CII Director General, Chandrajit Banerjee, on account of domestic demand.  

"Given the optimistic outlook in gross sales it is hardly surprising that selling prices and new orders/contracts are reflecting an upward trend over the previous quarter. The much expected and awaited notification about the Procurement policy, may also be a reason for buoyancy expected in the gross sales," Banerjee said.

Related opportunities
  • Bakery & Confectionary
    We started our journey on 15 august 2017 with husband..
    Locations looking for expansion Maharashtra
    Establishment year 2020
    Franchising Launch Date 2022
    Investment size Rs. 10lakh - 20lakh
    Space required 100
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Kandivali west Maharashtra
  • Consumer Electronics
    Established in the year 2000, Lotus has emerged as the..
    Locations looking for expansion Delhi
    Establishment year 2000
    Franchising Launch Date 2023
    Investment size Rs. 2 Cr. - 5 Cr
    Space required 5000
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Delhi Delhi
  • Senior Citizen Home Healthcare Services
    PROFESSIONAL AND PREMIUM HOME NURSING SERVICES FOR ELDERLY AND BEDRIDDEN..
    Locations looking for expansion TAMILNADU
    Establishment year 2012
    Franchising Launch Date 2020
    Investment size Rs. 5lakh - 10lakh
    Space required 750
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater CHENNAI TAMILNADU
  • Opticians/Eye Wear
    YourSpex, founded by GKB Eyecare, has a twofold mission: to..
    Locations looking for expansion Uttar pradesh
    Establishment year 1950
    Franchising Launch Date 2023
    Investment size Rs. 20lakh - 30lakh
    Space required 500
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Dadri Uttar pradesh
Insta-Subscribe to
The Franchising World
Magazine
tfw-80x109
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
email
mobile
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities

Free Advice - Ask Our Experts

pincode
;
ads ads ads ads