Hotline: 1800 102 2007
Hotline: 1800 102 2007
Search Business Opportunities
2011-08-05

RBI's rate hike impacts SMEs

A continuous rate hike strategy by RBI has impacted SMES

RBI's rate hike impacts SMEs

Continuous policy rate hikes by Reserve Bank of India (RBI) consecutively for twelve times have thrown many small and medium enterprises (SMEs) out of business and others are on the brink of being out of business, an industry body survey revealed.

This is a matter of serious concern. RBI's continued strategy of increasing lending rates without attempting to address the issues of high credit cost to the SME sector may lead to more non-performing assets (NPAs) of banks, as high raw-material cost and low margins would put pressure on SMEs, leading to their inability to repay loans, said survey conducted by ASSOCHAM.

"...increased cost of inputs may affect their (SMEs) ability to service loans/interest commitments and may be a major factor for increased NPAs of banks," it said.

ASSOCHAM said that the continued increased fuel prices, ever increase in lending rates are the worst hit and could be heading for a serious trouble.

SMEs have shared that there has been a decline of around 15 percent market share of SMEs, 20 percent in their profit margins and 24 percent reduction in total production capacity, which are serious subjects.

Therefore, ASSOCHAM survey has revealed the serious undercurrent of the financial position and its impact on the rising cost of funds, consequent upon undeterred hike in key policy rates of RBI, affecting one of the most important sectors of the economy—the SMEs.

Related opportunities
  • Quick Service Restaurants
    About Us: A new eatery in town serving  authentic Hungarian chimney..
    Locations looking for expansion Maharashtra
    Establishment year 2018
    Franchising Launch Date 2018
    Investment size Rs. 10lac - 20lac
    Space required 200
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater pune Maharashtra
  • Education Supplies
    About Us: TicTacToe Learning Center is an afterschool program, learning English..
    Locations looking for expansion Maharashtra
    Establishment year 2018
    Franchising Launch Date 2019
    Investment size Rs. 1 Cr. - 2 Cr
    Space required 4000
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Mumbai Maharashtra
  • Others Food Service
    About Us: Thindi Xpress with its rich ingredients and unique dishes..
    Locations looking for expansion Karnataka
    Establishment year 2017
    Franchising Launch Date 2019
    Investment size Rs. 20lac - 30lac
    Space required 400
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Bangalore Karnataka
  • Fine Dine Restaurants
    About Us: India’s first conveyor belt restaurant        &..
    Locations looking for expansion Maharashtra
    Establishment year 2018
    Franchising Launch Date 2019
    Investment size Rs. 1 Cr. - 2 Cr
    Space required 2500
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater pune Maharashtra
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