Interest rates hit MSMEs
Hotline: 1800 102 2007
X
Search Business Opportunities
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

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
  • Partner with Cafe Frespresso and be part of India’s fastest..
    Locations looking for expansion Gujarat
    Establishment year 2010
    Franchising Launch Date 2010
    Investment size Rs. 10lac - 20lac
    Space required 100
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater vapi Gujarat
  • About Us: MCTA provides Job Ready Certification Programs in Digital Marketing..
    Locations looking for expansion Maharashtra
    Establishment year 2016
    Franchising Launch Date 2018
    Investment size Rs. 10lac - 20lac
    Space required 650
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Mumbai Maharashtra
  • Cosmetics & Beauty Product Stores
    About Us: Vega Industries Private Limited, Launched in 2000, formerly known..
    Locations looking for expansion New Delhi
    Establishment year 2001
    Franchising Launch Date 2018
    Investment size Rs. 10lac - 20lac
    Space required 50
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Delhi New Delhi
  • Art, Craft, Antique & Framing
    About: Shilpa Suneja Designs is a venture of Incandescent Papers Pvt...
    Locations looking for expansion Delhi
    Establishment year 1977
    Franchising Launch Date 2017
    Investment size Rs. 10lac - 20lac
    Space required 250
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater New delhi Delhi
Insta-Subscribe to
The Franchising World
Magazine
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
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