INSOLVENCY AND BANKRUPTCY CODE – IS IT BENEFICIAL TO SMEs IN INDIA?
Insolvency code will boost confidence among entrepreneurs by taking away the fear of failure by offering support for turnaround or liquidation in a non-threatening way. It will enlarge the lending basket for SMEs.
Parliament recently passed Insolvency and Bankruptcy Code Bill that seeks to update and consolidate existing laws in this regard. The bankruptcy law is widely hailed as a landmark by the industry as it will improve ease of doing business in India by expediting resolution of stressed assets and streamlining the process of liquidating a business. Distress situation appears in any individuals’ life. Equally, it can appear in any business. Compared to large companies, SMEs are very vulnerable to distress as the capacity to endure the distress is not there or very scarce. Secondly, distress need not be self-inflicted; it can be due to changes economic scenario, distress in key buyers’ business, a shift in customer preference etc. Distress Management is an important exercise to nurse back the enterprise to a productive state. Legal cover in the form of Insolvency and Bankruptcy code is a great support to manage the distress. (What is distress Management?)Read more
Industry Research: An important input for SMEs
Does our company have a business strategy that makes sense within the context of changing general industry characteristics and economic environment?”
Industry within which a company operates is important to analyse the total risks the company exposed to. The studying industry provides insights to help you answer the above question.Read more
Risk Management in SMEs– A process to harmonise survival and growth
ecently Deccan Herald has reported a serious fraud happened in a Bangalore-based private company which likely to push the company to the brink of collapse. (http://www.deccanherald.com/content/539095/cid-ordered-probe-multi-crore.html)
The brief of fraud:
It is reported that 11 officials of the company have misappropriation of funds of Rs 200 crores. Bank staff were also suspected. They used cheques and documents forging signatures of MD of the company.Read more
How to build a successful fundraising strategy for SMEs
Fund Raising is seen as a challenge by many SMEs. The methodical approach can assist to maximise the benefits.
Fundraising (loan or equity) has been a challenge for SMEs- be it at start up stage, growth, expansion or maturity. Fundraising is described as a painful exercise by many SMEs mainly due to their lack of awareness about the appropriate approach and hence vulnerable to exploitation by unscrupulous elements.Read more