Here the MSME Cluster Programme Defines A Cluster With The Following Characteristics:
(a) Similarity or complementarity in the methods of production, quality control & testing, energy consumption, pollution control, etc.
(b) Similar level of technology & marketing strategies/practices
(c) Similar channels for communication among the members of the cluster
(d) Common market & skill needs
(e) Common challenges & opportunities that the cluster faces.
Around 150 MSME clusters were connected virtually for the Bengaluru event (9th November 2024), with senior bank officials present in each cluster.
Why Indian MSMEs Need Working Capital: A Deep Dive
a) Managing Seasonal Fluctuations
Most MSMEs hit their signature sales during festive season. Rest of the year they're either at the medium graph or at the lowest sales position due to tough competition by well funded brands
b) Inventory Management: Many times, MSMEs mispredict the future sales graph and mismanagement of inventory happens (here cashflow gets hampered). Few products aren't able to use further due to expiration and leads to big losses.
c) Operational Costs: Hiring & taking care (food + accommodation + insurance) of the skilled manpower is becoming costlier. Low tenure of employees leads to loss of time & opportunity (a quick backup of replaceable manpower is needed frequently)
Many MSMEs (especially who takes the warehouse/workshop on rent need constant relocation - consuming more travel expenses)
d) Agreement Conditions: Even if a few agreement conditions are unfavourable, still they accept & continue the operations up to their capability.
e) Technology Adoption: Even if few funds are allocated to the technology, they'll still avoid spending on tech due to insufficient knowledge and non tech savvy mindset.
f) Research and Development: All the small scale level MSMEs hardly invests a good portion of profits in R&D. Their R&D is manual (observing consumer behaviour, noting down customers complaints, and following the competitor's trends)
g) Overcoming Economic Shocks: MSMEs have a tough mindset and will never leave the field. They'll find any Indian jugaads to overcome any major competitor with their own 'Desi Innovation'
h) Government Rules: Few MSMEs don't understand the official GRs of govt. and aren't aware of the complete notice. MSMEs in rural areas feedback & insights don't reach the right dept. Thus, implementation of the right schemes gets delayed in different areas.
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