According to data from the Union government, Madhya Pradesh’s MSME sector has grown less during the last two years. Over the previous two years, MP saw a decline in the number of MSMEs registered on the Union government’s Udyam Registration Portal (URP).
Manufacturing, services, and trading are the three industries where MSMEs are recognised. Compared to 2023–2024, MSME registrations in MP decreased in all three industries in 2024–2025.
For MSMEs to be recognised by the government and get a number of benefits, such as access to government schemes and subsidies and participation in procurement processes, they must register on the Udyam Registration Portal. Additionally, there were more MSMEs that closed in the state in 2024–2025 than in 2023–2024.
#Shut Down Rate Higher than Opening New MSMEs in MP
According to the data that was made public, more MSMEs were closed in 2024–25, while fewer were registered in 2023–24. Over the past two years, there has been a decrease of 17,845 MSME units in MP in terms of new businesses registered on the URP and Udyam Assist Platform (UAP), both by year and sector.
In the three sectors of manufacturing, services, and trading, a total of 231,164 units were registered in 2024–2025; this was smaller than the 249,009 units registered in 2023–2024. There were 1,961 businesses deregistered as a result of shutdowns in 2024–2025 compared to 552 in 2023–2024.
This was further supported by data presented to the Rajya Sabha on August 4 by Minister of State for Micro, Small, and Medium Enterprises Shobha Karandlaje on new businesses registered on URP and UAP by state, year, and sector.
How Udyam Helping MSMEs of India?
To make it easier for MSMEs to register, the Ministry of MSME introduced the Udyam Registration Portal (URP) on July 1, 2020. In collaboration with the Small Industries Development Bank of India (SIDBI), the Udyam Assist Platform (UAP) was introduced on January 11, 2023, for Informal Micro Enterprises (IMEs) that do not have a PAN and are not subject to GST.
The goal of the project was to make conducting business easier, provide MSMEs a sense of identity, and qualify them for the schemes’ benefits. The union government added that MSMEs may deregister for a number of reasons, including ownership changes, firm location changes, and more. As a percentage of all MSMEs that have registered since the definition was revised on July 1, 2020, the number of MSMEs that have closed in the nation is 0.15%, according to the Udyam Portal.
Madhya Pradesh MSME Development Policy 2025
In 2017, the United Nations General Assembly proclaimed June 27th to be “International MSME Day”. The Madhya Pradesh’s MSME Development Policy 2025 was unveiled recently by the state government.
On this year’s “International MSME Day”, Chief Minister Mohan Yadav stated that MP’s MSMEs have become important designers of the state’s social and economic future. According to Yadav, the government wants to use the MSME sector to guarantee that at least one member of every family works for themselves or is employed.
Quick Shots
•Registrations
on Udyam Portal decline across manufacturing, services, and trading sectors
in 2024–25 compared to 2023–24.
•Total
registrations fell from 2,49,009 (2023–24) to 2,31,164 (2024–25) – a drop of
17,845 units.
•Closures
surged: 1,961 MSMEs shut down in 2024–25 vs. 552 in 2023–24.
•CM Mohan
Yadav on International MSME Day (June 27): MSMEs are key to the state’s
economic and social growth.
On January 9, M Nagaraju, the secretary of financial services, announced that the Union government would shortly introduce a new credit guarantee program for the MSME sector that would cover loans up to INR 100 crore.
He stated on the last day of Grameen Bharat Mahotsav that the centre is likely to implement a plan that was revealed by the Finance Minister, Nirmala Sitharaman at her most recent budget session and that might offer loans up to INR 100 crore without guarantee if they already have the business. According to the official, 50 million people are employed in the Micro, Small, and Medium Enterprises (MSMEs) sector. It is anticipated that the plan would shortly be presented to the Union Cabinet for approval.
Sharing his views on the development, Amit Sarda, Co-founder & MD, Soulflower stated, “For Soulflower, this initiative represents an opportunity to accelerate our mission of delivering sustainable, innovative, and high-efficacy personal care solutions. With access to affordable financing, we can expand our operations to new markets, invest in cutting-edge R&D for preservative-free and clinically proven products, and enhance our commitment to sustainability through biodegradable packaging and eco-friendly production methods, and most importantly, access to cheaper working capital as compared to venture capital funds.”
Similar thoughts were echoed by Abdul Nasir Shaikh, founder and CEO of Total Coaching and Mentoring Collective LLP (TCMC India); he said, “This scheme not only promises to bridge the financial gap but also instills confidence in entrepreneurs to pursue bold ideas and scale operations. By reducing the perceived risk for financial institutions, it paves the way for more inclusive credit disbursement, particularly for first-time entrepreneurs and businesses in underserved sectors. As someone deeply engaged in coaching and mentoring MSMEs and startups, I see this as a significant enabler of growth. The availability of guaranteed credit can allow businesses to invest in technology, enhance operational efficiency, and expand their market presence.”
“Well, it is a transformative step for small businesses and startups in India. Access to credit has long been a major hurdle for MSMEs, with many struggling to secure funding due to a lack of collateral or perceived risks. This initiative could provide the much-needed financial support to help these enterprises scale operations, invest in innovation, and navigate market challenges. For startups, this scheme opens doors to more robust growth opportunities, and it will allow them to focus on product development and market expansion. Moreover, it could encourage more and more entrepreneurs to enter the ecosystem, promoting job creation and contributing to the economy,” opined Tanay Sharma, Co-Founder & COO, CITTA.
Facilitating Term Loan for MSME
Sitharaman declared in the Union Budget 2024–2025 that a credit guarantee program will be implemented to enable MSMEs to get term loans for the acquisition of machinery and equipment without the need for collateral or third-party guarantees. According to her, each applicant will receive a guarantee cover of up to INR 100 crore from a separately established self-financing guarantee fund; however, the loan amount may be higher.
In addition to a yearly guarantee cost on the lowered loan balance, the borrower will be required to pay an upfront guarantee fee. From INR 3.95 lakh crore in 2020–21 to INR 12.39 lakh crore in 2024–25, MSMEs’ exports have increased dramatically.
“As India takes significant steps to strengthen its MSME ecosystem, the Loan Guarantee Scheme plays a crucial role in promoting financial inclusivity and growth,” said Nilesh Dungarwal, Co-founder & CEO, WorkIndia.
MSME Showing Remarkable Performance
Over the years, the MSME sector in India has made a substantial contribution to the GDP of the country by continuously exhibiting exceptional resilience and adaptability. MSMEs’ Gross Value Added (GVA) as a percentage of India’s GDP was 29.7% in 2017–18 and 30.1% in 2022–2023.
Nagaraju emphasised the significance of connecting microenterprises, self-help groups (SHGs), and rural producers with banking services and market prospects. India is a village-based country. “A lot of things in the country are actually driven by Grameen Bharat,” he remarked. And all around the nation, villages are the new hubs of development.
He praised the government’s main efforts to promote financial inclusion, pointing out that the Pradhan Mantri Jan Dhan Yojana (PMJDY) opened over 53 crore new bank accounts, with women from rural regions making up the bulk of the beneficiaries. Nagaraju further emphasised how SHGs help rural communities develop economic resilience and entrepreneurship.
The Scheme Aligns with Government’s Vision
The program supports the government’s goal of boosting rural entrepreneurship. In order to realise the Vikshit Bharat goal, Nagaraju stressed the significance of concentrating on quality, export connections, capacity growth, and all-encompassing support.
The declaration emphasises the government’s dedication to supporting sustainable economic growth and boosting MSMEs. The industry is well-positioned to boost local wealth and India’s standing in international trade with an emphasis on innovation and growth.
We all aspire to do something huge. Regardless of whether we are a student, a business professional, a startup founder, or an entrepreneur to be, our aspiration is what propelled us to greatness.
The Indian government also realized the importance of our aspirations and has launched the “ASPIRE” scheme. The naming of the scheme is also entirely significant, which refers to “A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship” when the acronym is expanded.
Coming under the Ministry of Micro, Small and Medium Enterprises, Government of India, the ASPIRE scheme was launched in 2015, and is aimed to help foster entrepreneurship. Like other innovative Government of India schemes that the Modi-led government has launched, the ASPIRE scheme also has a huge potential to improve the industrial sectors and bring in a period of growth for the country. Much like the growth of Indian startups and unicorn companies of India, which make interesting reads, the schemes of India, which strive to gear up for the new age, Atmanirbhar Bharat, shall also be known thoroughly. This is why StartupTalky has come up with this article that is solely dedicated to the ASPIRE scheme of the Indian government.
Furthermore, the scheme is also aimed to provide financial support to set up Livelihood Business Incubators (LBI) or Technology Business Incubators (TBI). The 3 main components of the ASPIRE scheme can be summed up:
TBI, or Technology Business Incubation – In this category, the ASPIRE scheme will help the incubators of technology tap into the potential technology-related ideas and innovations by utilizing the existing infrastructure and expertise that are available already with the incubators. TBI would encourage the growth of enterprises through the application of technology and innovation. Besides, it will also support economic development strategies for small business development. Also, the TBI incubators would foster growth in local economies and extend mechanisms for technology transfer.
Promotion of Startups via SIDBI referred to as the Small Industries Development Bank of India – SIDBI would usher in creative scalable ideas/innovations and strive to convert them into commercially viable enterprises. A fund of funds is also created under SIDBI, which it can utilize to invest in startups and other early enterprises, thereby converting such ideas/innovations. These investments would only be in the startups that belong to the rural/agro-based industries. There will be no investment for the companies that run on the basis of technology.
The ASPIRE scheme promotes innovation to further strengthen the competitiveness of the MSME sector
It strives to provide monetary aid, which can be utilized to buy plants and machinery other than land and infrastructure, or an amount of INR 100 lakhs, whichever is less.
It also aims to provide practical business experiences to the budding entrepreneurs
Eligibility for the ASPIRE Scheme
If you are wondering about “who are eligible for the ASPIRE government of India scheme?” then all the startups and the traditional enterprises are all in luck because are eligible to reap the benefit of the ASPIRE Yojana.
In the union budget of 2019 that was presented by Finance Minister Nirmala Sitharaman, the government of India stated that around 80 livelihood businesses and up to 20 technology business incubators will be generating close to 75,000 skilled entrepreneurs in the agro-rural industry industries under the ASPIRE Scheme.
As soon as a company fills out an application for the ASPIRE scheme, it is sent to the committee of the ASPIRE Scheme that deals with such applications under the Ministry of MSME, which is entitled to provide support to any companies/startups who want to learn about the scheme.
Now, after a specific company/startup fulfills all the eligibility criteria for the ASPIRE scheme, the Ministry of the government of India which deals with these schemes proceeds with the general processes and offers all the benefits to the beneficiaries under the scheme.
The Goal of ASPIRE | What did the GOI Decide via ASPIRE Scheme?
Funding Allocation of ASPIRE
Under the ASPIRE scheme, the Government of India wanted to build 80 Livelihood business incubators via NSIC, KVIC or Coir Board, or any other institution/agency of the Central or State government on their own or via any of the agency or scheme. This is to be done with the sole aim of promoting innovation, and entrepreneurship and boosting the growth of the agro-industry.
How can Startups Reap the Benefits of the ASPIRE Scheme?
Both traditional enterprises and startups are eligible for the benefits under the ASPIRE scheme. Now, if you are also associated with enterprises and startups that are eligible for ASPIRE, then you should urge the company to send an application to the ASPIRE Scheme steering committee, which works under the Ministry of MSME. This committee will extend support in the overall policy, coordination, management, and more. It will first deal with the general process and would then percolate the benefits to the enterprises that fulfill the eligibility criteria.
Looking at the growth of startups and an increasing sense of passion among entrepreneurs, the Indian Government is trying to make as many efforts as possible to support them. Therefore, the ASPIRE Scheme is yet another initiative by the government of India to promote entrepreneurship and innovative startups in the agro-industry. The above article will help you understand the goals and objectives of the scheme, its eligibility criteria, and how startups can take advantage of it.
FAQs
When was ASPIRE Scheme launched and Why?
The ASPIRE scheme was launched in 2015 and is aimed to help foster entrepreneurship.
What does ASPIRE stand for?
ASPIRE stands for A Scheme for Promotion of Innovation, Rural Industries, and Entrepreneurship.
Which Government body controls ASPIRE scheme?
ASPIRE scheme falls under the Ministry of Micro, Small and Medium Enterprises, Government of India.
Jute bags are used for shopping purposes. Our environment today is polluted to an extreme level. Nowadays, printed jute bags are used for shopping purposes too. Jute is a long, soft, shiny vegetable fibre. It is also popularly known as Golden fibre. Currently, it is one of the strongest all-natural fibres available throughout the globe. Jute fibre is reusable and biodegradable. Starting a jute bag-making business is a great decision to start. It is also a profitable business because the usage of jute bags has excessively increased over the last year. People nowadays carry these bags as a style trend.
There are several different types of bags that are very popular in the market. A recent study has shown that the general public has become very bored with carrying leather bags. The jute bag-making process is simple. Any individual can start this business even from home. Furthermore, this is a great opportunity for women, housewives, and mothers too. In this article, we will discuss how to start a jute bag-making business.
Before starting and making a jute bag business plan, you should know the different types of Jute bags you can manufacture. There are numerous types of jute bags you can find in the market. According to lamination or lining, there are three different types of bags.
Jute bags are versatile and can be used as gift bags
These bags are used as shopping bags all over the world
It is used for transferring products from one place to another
Identify the Demand of Jute Bags
Global Jute Bag Market
Jute has properties like low thermal conductivity, remarkable insulation, and moderate moisture retention. So Jute bags are strong enough to pack bulk goods. The growing environmental concerns have also increased the customer’s inclination toward natural and biodegradable products like jute bags.
As per industry estimates, India has exported millions of jute bags mainly to Europe. The production of this item which is mainly in the micro and small enterprises has picked up substantially in the last few years. There is a big scope globally for Indian jute shopping bags as an alternative to plastic bags. India holds the majority of shares representing the leading producer of jute bags. Additionally, the benefits offered by jute bags such as their biodegradability, durability, low cost, high strength, etc. have supported the market growth.
According to a survey, the jute bag market value had touched $ 1.9 Billion in the year 2020. Jute bags recorded an 11.5% CAGR from 2011 to 2018. The global jute bag market size reached $ 2.3 Billion in 2021. The market is expected to reach $ 3.3 Billion by 2026, exhibiting a CAGR of 9.4 % from 2022 to 2027.
Jute Bags Business Planning
When you start any business there are various things you need to consider. Whether you are in the beginning stages of starting your own business or planning on taking it to the next level, you will need a clear and informative business plan. You need to ask yourself, Where do I want it to go? What will my business look like? A business plan will provide readers with all types of information they need to understand your business’s purpose and capabilities. You have to be willing to add, edit, or even remove certain portions of your business plan when new information becomes available.
Choosing Location of Your Business
Choosing a business location is all about setting your business for success. You need to put careful thought into where you want to establish your Jute bag business.
Some tips for choosing a good location:
Before you start looking for a business location you need to create a business budget for your expenditure.
Before you buy or rent a building, check out the surrounding neighbourhood.
Part of your business location strategy should be based on the amount of competition in the area.
Consider the potential growth of your company when choosing a location for the business.
Consider how easy it is for customers to reach the Jute business location.
Before you purchase a location for business, find out how it is zoned.
Register Your Jute Bag Making Business
For a very small startup, you can look for a proprietorship company. However, you may also go with the partnership, LLC, or INC companies according to your business size and investment model. Generally, this type of business plan doesn’t demand any specific licenses from the Government authorities. In India, National Centre for Jute Diversification (NCJD) and Jute Manufacturers Development Council (JMDC) offer training on jute bag making.
Steps Involved in Jute Bags Making
The process of manufacturing jute bags is very simple and does not require the use of heavy machines. Below are the steps involved in jute bag making:
Buy woven jute fabric rolls from wholesalers or directly from manufacturers.
Laminate the jute rolls. Jute bags can be sold with lamination or without lamination.
Spread the jute fabric roll on a table and fix it.
Cut the jute rolls to the required size and shape.
Print the designs, logos, or text on the jute roll pieces.
Wash and dry the printed jute fabric pieces.
Stitch the cut pieces of jute roll using a heavy-duty sewing machine.
Attach the handles, buckles, zips, etc.
Pack the jute bags for marketing.
Raw Materials Used in Jute Bag Making
India and Bangladesh are the top producers of jute fibre. In India, West Bengal accounts for 50% of the country’s total jute produce. So, source your raw materials from reasonable and genuine jute mills.
The raw materials used in jute bag making are:
Jute fabric
Dyes
Printing gum
Sewing thread (preferably nylon)
Chemicals and auxiliaries
Handles
PVC buckles
Packing materials
Labels
Types of Machinery for Jute Bag Making Business
Jute bag manufacturing does not require high-end technology machinery. It all depends on the scale and type of bags. To make a printed jute bag, the following machinery is required.
Working table
Lamination machine
Printing Table
Screen printing machine
Dye Paste Stirrer
Water Drum, tubes, mugs, clips, etc.
Cottage Steamer
Electric Fittings
Scissors and measuring tape
Cutting machine
Heavy-duty Sewing machine
Regular sewing machine
Nylon thread
Lockstitch Machines
Side Sealing Machine
Marketing Strategies of Jute Bag Business
Marketing strategies are the processes by which companies create customer interest in goods or services. Marketing draws out the hidden wants of customers and creates new demand. It enlarges the market and enables the producers to increase production and earn more profits. Because of marketing so many other activities such as banking, transport, insurance warehousing, etc. get a boost as they are needed more help in the marketing process.
Some techniques of marketing Jute Bag Business:
Word of mouth
Comprehensive website
Social marketing
Direct marketing
Major festivals
Online shopping sites
NGO tie-ups
Local tie-ups
Corporate gifts
Conferences and seminars
Conclusion
Starting any kind of business needs patience and hard work. Getting into the business of making jute boxes is not something different. With people being conscious about the environment, and inclining toward jute bags, the market has experienced definite growth. So, it is clear that the market for jute bags will keep rising in the future as well.
FAQs
What raw materials are needed for making jute bags?
The raw materials needed for making jute bags are:
Jute fabric
Dyes
Printing gum
Sewing thread (preferably nylon)
Chemicals and auxiliaries
Handles
PVC buckles
Packing materials
Labels
Which country is the top exporter of jute bags?
India is the top exporter country of jute bags.
What products are made from jute?
The major manufactured products from jute fibre are:
Yarn and Twine
Bags
Sacking
Hessian
Carpet Backing Cloth
Textile Blends
Which are the top Jute producing countries in the world?
India and Bangladesh are the top Jute producing countries in the world.
Countries across the globe are doing their best to improve the condition of MSME and hence, the economy. Small and medium businesses or companies are corporations whose staff and outputs aren’t huge. The abbreviation SME (Small and Medium Enterprises) is used by societies, organizations, and institutions worldwide. Some examples include the United Nations, IMF, etc. SMEs are now challenging big corporations in their domains and taking value creation to new heights.
In July 2011, the EU Commission announced it’d unlock a gathering on the outline of SMEs in 2012. And it identified three parameters to define the eligibility of an SME:
Micro commodities are corporations with up to 10 workers.
Small corporations employ up to 50 labourers.
Medium-sized investments have up to 250 employees.
Here are 9 business ideas to start out as a micro, small, or medium enterprise:
The EU explanation of SME is, “The classification of micro, small, and medium-sized investments comprises companies which assign rarer than 250 employees and which retain an annual turnover not surpassing 50 million euro. And/or an annual proportion sheet entire not outweighing 43 million euros.” The explanation in Germany gave birth to a threshold of 255 workers, while in Belgium it could amass 100.
MSMEs take advantage of a major position in economic and social improvement, thereby empowering flip to entrepreneurship, as they need intrinsic factors of being creative and conscious of altering market dynamics.
The Micro, small and medium enterprises (MSME) sector has emerged as a highly active and emotional area of the Indian thrift. It is widely celebrated as a machine of economic development, particularly within the context of Make in India by the Government.
List of MSME Business Ideas in India:
1. Jute Shopping Bags
Jute Bags
Jute fabrics are tough, reliable, light, desirable, and more inexpensive than most of the textures earned from fibres. There is an extremely easy sewing appliance/device available for creating jute bags. There is a reasonable need for jute bags in India which makes it one of the best MSME businesses in India.
Jute bags retain decent export potentiality. Raw materials expected for preparing Jute bags are cotton strings and Jute fibre fabric. It can be stored in a grassland carton and shipped. The common jute bag model attained a significance of US$ 1.4 Billion in 2016 and showed a CAGR of over 11% during the period 2009-16.
The demand is propelled to attain the importance of US$ 2.6 Billion by 2022. Indian jute carry and shopping purses exporters are exporting millions of backpacks every year.
2. High-Temperature Aluminum Established Paint
Heat-resistant aluminium paint and dyes can withstand sickness, blazes, oil, rust and fumes, making them an excellent choice for particular petitions. The paint is instructed by stirring a special binder or binder mixture, solution or solvent mixture, and additions.
Perhaps, a tint or group of tints concurrently is the same way to generate a particular formulation that, when fixed will retain specific properties. The global need for colour and coverings is predicted to surge 3.7 per cent per year to 54.7 million metric tons in 2020, esteemed at $193 billion.
The market has examined a rise in the demand for high-temperature coverings from the automotive enterprise. High-temperature coatings are greatly expended as cookware, stoves, grills, and bakeware since they furnish outstanding opposition against warmness.
3. Pan Masala, Meetha, And Sartha
Pan masala is a proportional recipe of betel layer with lime areca loon, clove, cardamom, mint, tobacco, essence and other components. It generally works as a mouth freshener and is way better than the Western unnatural pan masala (created using artificial ingredients).
As a result, India outperforms the schedule of smokeless tobacco addicts in the world with almost 83% of buyers. Indians are so obsessed with flavoured tobacco pan masala and gutkha despite the ban on its trade and sale in 11 governments to date.
Shoppers are however buying grip of their everyday fix, courtesy contraband sales. Among the several categories of pan masala functional within the Indian market, pan masala containing tobacco depicts the dominating category analysis for over 50% of the entire demand. As an amount, there’s a good expanse for a replacement entrepreneur to subsidize in this industry.
4. Turmeric, Dhania, and Chilli Powder
Turmeric, Dhaniya and Chilli Powder
Seasonings affect odour, colour, and flavour to a large extent. The unstable oils from seasonings give the odour and the oleoresin imparts the flavour. Spices are a non-leafy portion of grains utilized as a flavouring or sauce, although several also can be utilized as a herbal treatment.
The Indian spices demand is propelled and reached nearly USD 18 billion in 2020, and expansion within the area is anticipated to be overseen by branded spices and spice combinations. The Indian government is aggressively stimulating spice exports through several enterprises.
Spice gardens offer widespread processing capabilities to both makers and exporters. This is one of the top MSME business ideas and there’s a good extent for an early age entrepreneur to invest in this business.
5. Neem Oil
Neem Oil
Neem oil is attained from the cereals of the Azadirachta indica. Utilization of the neem plant is to be established with the crisis of institution of standardized exhibition and crushing of grains. Neem oil extractive, the residue from the neem oil refining process, is a beneficial mosquito larvicide. The substance acts as an immediate assassin of the first instar larvae of culex fatigans at 0.04% attention whereas, at deeper attention, it had halted toxicity.
Azadirachtin, a full-of-life compound obtained from neem seeds and different portions, has insecticidal properties. It’s an alternative to artificial pesticides. Projected development within the common biopesticide demand at a CAGR of 15.8 percent from 2012 to 2017 may be a standpoint development driver for neem as a commodity.
6. Cow Urine Processing And Packaging
Gomutra is not a harmful waste substance. 95% of it is gas, 2.5% comprises urea, and the remaining 2.5% is a variety of minerals, salts, hormones and enzymes. Gomutra is urine from cows and is employed for remedial bases in informal Indian therapy, Ayurveda, and also for cleansing in Vaastu Sastra.
Cow urine has a bio enhancing trait for Rifampicin, the beginning line anti-tubercular medication used against tuberculosis, and boosts its action up to sevenfold against Escherichia coli, and up to 11 crumples against Gram-positive bacteria.
Cow urine is in demand not only in India but around the world. An excellent SME business idea is given that cow urine is getting even more recognition now for its benefits.
7. Sanitary Napkins
Sanitary Napkins appear under nonwoven textures, which as a good come under specialized material. In expansion to sanitary napkins, the non-woven cloth is furthermore obtained in various other commodities like cigarette filters, leads, airlines disposables, surgical disposables, and non-woven wipes.
The Indian Kotex market attained a significance of about US$ 414 million in 2016. The popularity and need for eco-friendly, bio-degradable feminine hygiene products are growing tremendously. The market is expected to exceed US$ 596 million by 2022, rising at a CAGR of over 6%.
By taking up this initiative, you’ll be empowering millions of girls and women to practice and achieve the right hygiene standards.
8. Cashew Nut Shell Oil
Cashew
Cashew Nut Shell Liquid (CNSL) is an adaptable by-product of the cashew fruit. The nut has a husk of nearly 1/8 inch density inside which is a delicate honeycomb configuration comprising an opaque reddish-brown viscous fluid. It’s named cashew nutshell fluid and is the pericarp liquid of the loon.
It’s often contemplated as an inexpensive component for unsaturated phenols. CNSL and polishes brought about from it are widely utilized for laminations, brake linings, electrical insulation, ground membranes, publishing inks, etc. Indian cashew nut commerce gives birth to an oil demand for CNSL.
CNSL Oil is expended in enterprises. Thus, there is a decent need for industrially expanded nations. The straight and quadratic direction criteria rated India’s cashew nutshell fluid export to be 19,044.47 tonnes and 23,483.48 tonnes for the year 2020 respectively. India is the biggest customer and also the second-largest builder of cashew nutshell fluid in the world.
9. Corrugated Galvanized Sheet
Metal sheets
The corrugated atomic number 26 panes are the most effective, widely recognized, and vastly usable low-cost shelter enclosing entity. Metal sheets are categorized consistent with their density and ground region. These are twirls constructed by roll shaping tools; the density and colour will therefore be unique.
These boards are emphasized with simple structures, high stability, and economical costs. The requirement for sheet metal covering is fulfilled through both regional safety and implication. It was 1,418,399 tons in 2017 and is expected to reach 2,852,906 tons by 2022.
Here is the variation of Micro, small and medium enterprises (MSME) in different countries:
India
The Administration of India authorized the Micro, Small and Medium Enterprises Development Act, 2006 encompassing explanations of micro, small, and medium enterprises as follows:
A standard business is an industry where the enterprise in factory and machinery is more than Rs. 5 crores but doesn’t exceed Rs. 10 crore.
The articles were restricted by the Ministry of Small Scale industries vide an announcement dated October 5, 2006.
Investments committed to giving employment are distinguished by their status of enterprise within the appliance as follows: A microenterprise is an investment where the enterprise in the appliance doesn’t outperform Rs. 10 lakh. A small business is an industry where the involvement within the material is more than Rs. 10 lakhs but accomplishments don’t exceed Rs. 2 crores. The medium investment could be a business where the undertaking within the appliance is around Rs. 2 crores but performance doesn’t exceed Rs. 5 crores.
Nigeria
The prominent bank of Nigeria distinguishes small and medium investments based on the investment and the amount of faculty assigned. The standards are a bargain basis between N5 million and N500 million, and an act of personnel courage between 20 and 300 workers.
Israel
In Israel, an industry is contemplated minor if it remembers not further than 50 workers. A normal industry clenches between 51 to 250 employees.
New Zealand
In New Zealand, 99% of businesses assign 50 or smaller faculty, and the accepted description of an SME is one with 19 or fewer workers.
Australia
In Australia, an SME encompasses 200 or fewer workers. Microbusiness consist of 1-2 workers. A small industry ranges from 3 to 15, a medium one has 16-200 resources, while a large enterprise has 201-500 workers.
Poland
The SME locality in Poland produces nearly 50% of the GDP, and out of that, for instance, micro-companies contributed 29.6%, minor corporations 7.7%, and fair firms 10.4% to the GDP in 2011.
Canada
The Canadian defines a minor industry to have occasionally 100 workers or more. In rare cases, less than 50 labourers qualify as a minor segment. A medium-sized business has around 500 hands.
Choose a product you want to sell, arrange finance, fill out the required documents, set up your store and start selling.
Which industries are included in MSME?
Leather products, Natural Fragrance and Flavours, Training and Educational Institutes, and Beauty Parlours are some of the top industries included in MSME.
Which business is best for MSME?
Gold and Diamond Jewellery, Ladies’ Undergarments, A4 and A3 Size Paper, and Production of Jute Bags are some of the best MSME businesses.
The entrepreneurial dreams of Indians have given the country over 94 Unicorns in recent years. This number is expected to cross a century by the end of 2022. Startups across the MSME sector have been at the heart of the Indian economy and generated millions of jobs for people across the country.
It is anticipated that MSMEs alone contribute 8% of the overall GDP, and startups play a huge role in it. But unfortunately, not every entrepreneurial dream gets the chance to take off due to a lack of funds. Keeping this in mind, the Indian government offers various government loans to help passionate entrepreneurs make through.
Budding entrepreneur with a revolutionary idea in mind should use the government loan schemes to transform their ideas into action. For further assistance of all entrepreneurs, we’ve curated this epic guide that has all the information on how to avail of a government loan for a startup.
Government business loans have always provided the necessary financial backing to startups. If a startup requires some financial help, the founders might want to apply for any one of the following government loans for a startup.
Pradhan Mantri MUDRA Yojana (PMMY)
Pradhan Mantri MUDRA Yojana (PMMY) – Government Business Loans for Startups
Launched in 2015, this government loan scheme offers business loans to non-corporate & non-farm small and micro-enterprises. Under this scheme, startups can avail of a loan amount of up to Rs. 10,00,000. The tenure for repayment for this collateral-free loan ranges from one year to five years. Startups can avail of this loan by visiting any nearest small finance bank, microfinance institution, commercial bank, and non-banking financial company.
The Pradhan Mantri MUDRA Yojana provides loans depending on the development stage of the startup. Hence, the applicants can find the following three segregation under this loan:
Loan Type
Coverage
Yearly Rate of Interest
Shishu
Up to Rs. 50,000
1% to 12%
Kishore
Above Rs. 50,000 to up to Rs. 5,00,000
8.60% to 11.15%
Tarun
Above Rs. 5,00,000 to up to Rs. 10,00,000
11.15% to 20%
Startup founders can apply for this loan if they’re a trader, shopkeeper, vendor, etc. Just visit any lending institution mentioned above or login to a PSB or 59 minutes portal and do the needful. They will guide further. Startups can utilize this loan as a working capital loan through the offered MUDRA card.
Pradhan Mantri MUDRA Yojana (PMMY) – Government Business Loans for Startups
MSME Loan in 59 Minutes
MSME Loan for Startups Approved in 59 minutes
As the name suggests, this loan offered by the government is approved in 59 minutes flat. Launched by SIDBI, this loan is ideal for small and medium-size startups that need capital assistance of under Rs. 10, 00,00,000 at a somewhat lesser interest rate. In some cases, the interest rate is as low as 8%.
To avail of this Public Sector Banks (PSB) loan scheme, startup founders can visit the Central Bank of India, Canara Bank, Bank of Baroda, Bank of India, SBI, etc., for a hassle-free loan application process. Once the loan application is processed and approved, the applicants can get the amount within 8-10 working days. Startup founders can also visit the PSB loan in 59 minutes portal to get more details about this loan scheme and apply.
Credit Guarantee Fund Trust Scheme for Micro & Small Enterprises
CGTMSE for starting new Business
Also known as CGTMSE, this government business loan provides collateral-free loans to startups. Launched by the SIDBI and MSME ministry, this loan scheme offers a loan amount of up to Rs. 2,00,00,000 to both new and existing startups. A special preference is given to women entrepreneurs under this loan scheme. Under the CGTMSE, startups can get a collateral-free loan of up to Rs. 10,00,000. But for any amount above this value, startups will have to provide collateral in the form of any building or land attached to the primary business.
Those who want to avail of the CGTMSE loan can approach a scheduled commercial bank or select a regional rural bank classified by NABARD for loan approval. Both new and existing startups can apply for this loan engaged in manufacturing activity, retail trade, and service activity.
Credit Facilitation Through Bank by NSIC
NSIC Launched by the MSME ministry for business loans
The NSIC has signed an MoU with various banks to provide super-fast and hassle-free loans to different startups. Launched by the MSME ministry, this one-of-a-kind loan facility is provided by NSIC under the central government. The best part of this government loan is that NSIC also helps complete the full documentation and legal formalities to quickly avail of the loan.
Small or medium startups needing a short-term loan for maintaining working capital or other operations should consider applying for this loan. It is a reasonably low-interest loan and can be availed by visiting any well-known banking institution like the HDFC bank, ICICI bank, Axis bank, YES bank, etc.
Credit Link Capital Subsidy Scheme
Also known as CCLCSS, it is a loan provided by the MSME ministry and the government of India to startups for technology upgradation. Startup founders that own a manufacturing enterprise, textile startup, fabrication unit, or any business that uses machines and equipment should avail of this loan of up to Rs. 15 lakh to upgrade to the latest technology. This loan helps startups stay up-to-date regarding technology to withstand the competition at local and global levels.
How to Choose the Best Loan Ideal for Your Business?
Now that the information related to top business loans offered by the government to startups is made available, some entrepreneurs might be confused about which one to proceed with. The answer is pretty simple. Every loan discussed above has a different purpose, interest rate, credit limit, etc. The startup founders should go ahead with the one that helps the business stay afloat and even scale in the best way possible.
To apply for any of the above-discussed government business loans, startup founders can head to the respective website of the financial institution providing the loan, fill out the application, and wait for someone from the organization to contact them. Business loans offered by Government are sure to help you accelerate your business growth, so they should be applied for.
FAQs
What are the Government loans for startups?
List of Government Loans for Startups are:
Pradhan Mantri MUDRA Yojana (PMMY)
MSME Loan in 59 Minutes
Credit Guarantee Fund Scheme for Micro & Small Enterprises
Credit Facilitation through Bank by NSIC
Credit Link Capital Subsidy Scheme
How much loan can you get under the MSME government business loan scheme?
Under the MSME government business loan scheme, as an MSME, a startup/business can get a loan sanction of up to Rs. 1 crore within just 59 minutes.
What is the eligibility for a startup business loan?
Eligibility Criteria for Startup Business Loan are:
Resident citizen of India
Minimum CIBIL score of 700
Business should at least 2 years old
Annual income of business should be at least INR 2 lakhs
Applicant Should be between 21 years to 65 years of age
Blue Ocean strategy and Red ocean strategies are widely used by startups. However, it is also perceived in MSMEs as well as Multinational enterprises and these strategies help them in finding the right market. Let’s look at what exactly is blue ocean and red ocean strategy.
In a red ocean market or a red ocean strategy, there is a concentrated market and will be highly competitive. These are normally found by the small but unpopular market. In a red ocean market, the competition would normally be high and the existing companies compete with each other using competitive methods.
One of the examples of a red ocean company can be different automobile companies. All the various companies are competing with each other to solve the same problem or the demand faced by the consumers. A red ocean market is highly competitive and would be riskier for a new company especially a startup.
Strategies to Enter Red Ocean Market
If you are planning to enter into a market that is mostly aligned towards a red ocean market then you will have to create a disturbance in the market. You will have to create a specific demand for your own product by creating a new product or an innovative product or service.
While creating a disturbance in the market, you will be able to gain most of your customer’s attention, and later on, it depends on your consumers to stick to your brand.
In a red ocean market, the main focus of your brand should be on beating the competition to gain the most value and the financial gain from overcoming the competition and attracting consumers towards your brand.
One of the most important ways to win over in such a market is by providing a lot of value for your consumers. The consumers should get the most out of their money this will help in winning over more than 60 % of the market consumer base.
Red Ocean Strategy Examples
Apple
Apple launched its iPhone in 2007 when the market was dominated by companies like Nokia, Sony and Motorola. Apple had to create a user base where users were willing to spend $600 on a phone. How did apple disrupt the market? they created a much better smartphone than its competitors which we all know today as iPhone 2g.
Steve Jobs with First iPhone
Five Guys
Five Guys is an American fast restaurant chain founded in 1986. Five Guys was planning to enter the fast-food market where its competitors, Mcdonalds and KFC were already dominating the market. How did it make it big in a highly competitive market? one of the reasons was it didn’t spend millions on advertising and presented good burgers with superior quality. It is now one of the top fast-food chains in America.
Red Ocean Strategy Examples in India
Spice Jet
SpiceJet is a great example of a Red Ocean company in India, SpiceJet is a low-cost airline that has acquired customers by offering services much lower than its competitors but it is always in direct competition with other companies.
A blue ocean strategy is focused more on the new trends and demands of the consumers in creating a new market based on it. Blue oceans are a more unoccupied market and not much known. The blue ocean market is mostly concentrated on providing value and is created based on that.
In the blue ocean strategy, a new product or service is created which is not available in the market which would solve a problem that is already there in the market. The blue ocean market pays a lot of attention to value and innovation aspects.
Strategies to Enter the Blue Ocean Market
The first and most important strategy is to identify a new demand or a new trend for a product or service. Before entering the market, you will have to conduct thorough research and analyze whether there is a new trend or a new demand in the market. You will have to analyze whether that demand is being met or whether the current products or service does not meet the demand.
In this market, it is not important to concentrate on the competitors as they are involved in providing the products or services that may or may not satisfy the demands of the consumers but what more important is to concentrate on the consumers and their needs and satisfaction.
The most important aspect of this market is that it is much more flexible which means if a new demand arises in the market, you can just create a new version of the product or come up with a new product that solves the requirement of the consumers.
The next step is to focus on a smaller niche and by doing so you will be able to design your product or service into a wider market targeting a specific group of people and will be able to build your own loyal consumers.
Blue Ocean Strategy Examples
Uber
Uber Logo
Uber is a great example of the Blue Ocean strategy. It solved one of the major problems of the consumers while booking cabs which was, denial of services, meter issues, and unwanted arguments.
Airbnb
Airbnb Logo
Airbnb is an online marketplace that acts as a mediator who wants to rent out their homes to people who are looking for places for accommodation. Airbnb eliminated the problems of travellers in finding a hotel with quality service. Airbnb is one of the most successful companies in the lodging industry with a revenue of $3.4 billion in 2020.
Blue Ocean Strategy Examples in India
Oyo Rooms
Oyo Rooms Logo
Oyo Rooms is a hotel chain founded by Ritesh Agarwal. Oyo Rooms entered an unexplored market, budget hospitality. It solved the problems of consumers who were looking for a decent hotel at an affordable price.
Conclusion
For a startup, both Blue Ocean and Red Ocean strategies aren’t a lot of worries as it absolutely relies on the possibility that you have and how well you execute it. In any case, the shots at filling in Red Ocean is more on the off chance that you have the option to make your image more accessible to the client and how great you promote your product, assuming your product, say, for instance, is of FMCG classification Red Ocean Strategy will be applied.
What’s more, on the off chance that it is of a few, for instance, gadgets or tech-based that give something which was not accessible before then Blue Ocean Strategy will be applied.
FAQ
Which companies use the blue ocean strategy?
iTunes, Bloomberg, and Ralph Lauren are some of the top companies that used the blue ocean strategy.
Does Netflix use the blue ocean strategy?
Yes, Netflix used the blue ocean strategy, It is a popular subscription-based streaming service.
What is an example of the red ocean strategy?
Indigo and Spice Jet in India are examples of Red Ocean strategy, they are providing low-cost airlines which have acquired customers but are always in direct competition with one another.
A village can be a hub of opportunities for an entrepreneur. There are fewer people and more problems to be solved. If you’re settled in a village or got some money to invest, what better way to provide value than to start your own business? These ideas require relatively less investment and can be a great way to start earning locally. The initiative by the government, Atmanirbhar Bharat has only boosted the startup opportunities in rural areas.
Startups based on local problems and businesses usually do well in villages as they’re trusted by the locals. That being said, here are 10 small business ideas for villages that you can start right now:
Minimum Investment required for Kirana Store – Rs.5 lakhs – Rs.15 lakhs
Kirana/Retail Store
Most people in a village have to make a trip to the city just to get essential supplies. This means that a journey has to be made simply to get what is needed for daily life. Even within the village the shops are mostly sparse and spread apart. Starting a Kirana store with essentials can be a well worth investment as people always prefer buying locally.
For getting essentials like dairy, everyday items, and groceries, it’s considered a blessing to have a good reliable retail store in the neighbourhood. Since you live there yourself, people are more likely to trust your business and buy your products.
Keep a standard for quality, inventory and supply chain. This will ensure that you get a steady flow of customers for years. A grocery shop can also be a storefront for many other businesses. Mobile recharge, DTH recharge, household items, etc. can be presented as well. This covid crisis proved that how Kirana stores can be a great investment, as when all the stores were shut retail stores were in great demand.
2. Rice/Wheat Mill
Minimum Investment required for Rice/Wheat Mill – Rs.10 Lakhs
Villages are almost certain to have rice plantations. Farmers normally depend on rice mills in the city to process their produce and this can get tedious over time. They have to pay for transportation and labour. Would you rather go to the city or prefer to get the job done in your village? Starting a rice mill business isn’t too much of an investment.
With the price for machines reducing, you just need a place to set it up and you’re good. Having a rice mill would enable villages to process their product from the village itself. By starting this business you’ll be doing the farmers a favour as well. A trustable mill to get the grains processed will always be welcomed by the people.
3. Organic Food Store
Minimum Investment required for Organic Food Store – Rs.10 Lakhs
If you’ve got the time or hobby to take care of plants then starting an organic food business might be the easiest and profitable business to start in your village. Fresh products are always high on value and in demand. Some people unknowingly grow enough organic vegetables in homes to start a small business. It doesn’t necessarily have to be a farm or large-scale produce.
Retail shops in cities nowadays have a separate section for organic produce. This is also one of those businesses that require the least investment. If you have some area to plant and time to look after the crops then it’s just a little effort to turn it into a successful business.
4. Oil Mill
Minimum Investment required for Oil Mill – Rs.5 lakhs
Oil is essential to almost any cooking project. The prices are also rising ever so slightly without you knowing it. Some people would prefer to get natural oil with their own supplies. In villages, it’s common for farmlands to have a considerable amount of coconut trees. Peanut, sunflower, and palm oils are products that people desire.
Starting an oil mill in a village enables its residence to convert products like coconuts into oils. These would normally be discarded and required oils would be bought. This means people wouldn’t have to travel to the city and they have access to it within the village itself. This does require you to buy the machines necessary but it’s sure to be generating revenue soon as you start.
Minimum Investment required for Arts and Crafts Store – Rs.10 lakhs
This is certainly one of the more interesting and low investment business ideas on the list. If you’re talented in art or know someone that is, starting an arts and crafts store could be a great idea. Tourists often visit villages and are willing to pay to get well-crafted memorabilia locally.
It could be pretty pottery, handmade toys, fans, or even handmade jewellery. Although it requires some talent, to begin with, it’s going to run smoothly as long as the place has visitors. Businesses like gift shops, tourist homes, and art stores are usually season-dependent. More people during the holidays will mean more sales. This is something to keep in mind while starting a business of this sort in rural areas.
In a survey, it was found that 98% of people prefer to buy essential products from a local store. This applies to meat shops as well. Being a mandatory part of the diet, people are meant to make this purchase. Nowadays shops like these sell all sorts of dairy products too. This can be a good business for anyone who sets it up in a rural area.
Butchers can be hired and poultry can be purchased from a farm. All it needs is good management and strict standards of quality. Once the sales start bumping up, you also have the choice to supply to nearby hotels and restaurants which can add to your source of income.
7. Handmade Soaps and Candles
Minimum Investment required for Handmade Soaps and Candles – Rs.1 Lakh
Another relatively easy-to-start small business is selling handmade soaps and candles. The craft requires no acquired skill and can be learned by another with time. People can be hired to work and eventually, your brand of handmade soaps can become a reality.
The same goes for candle-making. Handmade candles that are aromatic and cheap can sell fast. You can distribute your product with your own store or through other retailers within the area. Depending on how you perform, this is a scalable business.
8. Tutoring
Minimum Investment required for Tutoring – 0.5 – Rs.1 Lakh
Tutoring
If you’re qualified to teach or can hire teachers then starting a tutoring service in a small village is a great business idea. Schools in the area mean students who can use help with their studies. Math and Science are popular subjects for tutoring since students find it relatively difficult. With good intentions and a patient mindset, you can help out many children of all ages.
Like all businesses, if your services through an educational institute are good, it doesn’t take long before the place is crowded with students through word of mouth. Every year more students are in need and this means the business can sustain itself as long as you pay your bills.
Minimum Investment required for Internet Cafe – Rs.10 lakhs – Rs.15 lakhs
Indian Villages are being transformed every day yet some places still lack basic internet connectivity. In a world where everything from booking tickets to paying taxes is done online, internet access is a must. If the village lacks this basic access then starting an internet cafe can be very profitable.
Cheap hourly prices along with photocopy and scanning will satisfy most needs of the people. In a village without this facility, they would have to travel to the city. This business does require some initial investment for the internet and computers but it will likely be a successful one.
10. E-commerce Store
Minimum Investment required for E-commerce Store – Rs.15 lakhs
E-commerce Store
No matter where you are if you’ve got a product or an idea the internet grants you a way to turn it into a business. The best part about this business route is the vast array of possibilities. It could be anything from a traditional clothing store to something different like earthen pottery. Technology makes it so easy to start up your online store in minutes.
If you’re new to e-commerce some of these platforms have guides to help you learn the ropes. You could have a store that sells a single unique product or multiple products. These products once online can be bought by anyone in the world if you choose. CMS software makes this process a lot easier. If you’ve already got a successful physical store in the village, getting an online storefront can breathe new life into your business and bring in more revenue. Customers will appreciate the convenience and take advantage of this facility faster than you realize.
Poultry Farming, Milk centre, Flour Mills, and Drinking-Water Supply are some of the most profitable small business ideas in a village.
What are the most successful small businesses?
Cleaning, Social Media Management, Gardening, and Web Design are some of the most successful small businesses.
What business can I start in the village?
Milk Centre, Kirana Store, Electronics, Mobile and Accessories Store, Fertilizers & Seeds Storage Store, and Clothing Store are some of the businesses you can start in a village.
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Vayana Network.
With trade prospects diminishing amidst COVID-19, India’s small-and-medium enterprises (SME) sector — one of the largest in the world — could be exposed to life-threatening risks. With the government targeting an ambitious $5 trillion economy, trade was anticipated to climb steadily.
Trade financing could be the answer to a lot of these problems. By giving sellers access to credit lines, helping them discern business demands, using predictive analytics to solve problems, recognize changing consumer trends, and optimizing their supply chain operations, SMEs could better withstand the downturn in business activity. Pune-based Vayana Network — one of India’s biggest trade finance companies – is perfectly positioned to help SMEs do just that, and more.
Vayana strives to provide easy, digital access to low-cost financing to every enterprise – from large corporations to MSMEs – to help manage their working capital, grow business and create employment. Because of the relationships Vayana has cultivated over the years with corporates and financial institutions, most of the applications that it passes on to banks and NBFCs get approved quickly. The company trades on the trust it has built with all of its stakeholders, and it does so swiftly and successfully.
Vayana’s data-driven digital platform enables identification onboarding, financing, and servicing of creditworthy SMEs at significantly superior unit economics compared to traditional lenders. This allows them to create and offer affordable, convenient financing to the entire supply chain. They are also India’s largest GSP and e-invoicing platform.
Vayana Network- Founder
Vayana Network is founded by Ram Iyer.
Vayana Network Founder | Ram Iyer
Ram Iyer | CEO & Founder, Vayana Network
Ram Iyer, Founder & CEO of Vayana Network, is a serial entrepreneur with over 25 years in the Cash and Trade space providing solutions to some of the largest Banks across the globe. At Vayana Network, Ram has led the company’s vision to democratize access to affordable finance for MSMEs. Previously, he was the co-founder and CEO of CashTech Solutions, a leading Cash Management vendor in Asia which was acquired by Nasdaq listed Fundtech (now a part of the Finastra Group). He has previously worked with Accenture in their management consulting business.
He is a management graduate from IIM Ahmedabad and an Engineer from Mumbai University. A guest speaker at various Fintech & Trade forums, Ram brings an exceptional understanding of B2B trade, payment ecosystems, and technology.
Hiring Funda
Irrespective of hierarchical positions, they attract people who see themselves as ‘producers’ and ‘creators’ and not ‘managers’. They also are keen that everyone joining sees their role as something very significant – not just to the company but to their own professional and personal journeys.
Originated from Sanskrit, Vayana represents its vision of building meaningful Trade Financing relationships between Businesses and their Supply Chain partners.
How Vayana Network was Founded
Vayana is not Ram’s first entrepreneurial stint, Ram Iyer was previously the co-founder and CEO of CashTech Solutions, a leading Cash Management vendor in Asia which was acquired by Nasdaq listed, Fundtech in 2004.
After CashTech, he began selling banks systems to help manage companies’ trade finance. That’s when Mr. Iyer realized that there was a need and potential for a company like Vayana after several bankers he worked with told him that even though trade finance was a lucrative proposition, volumes of credit applications were quite low.
Vayana Network was started with a vision to democratize the access to trade finance to the smallest of enterprises. Team Vayana designs tailor-made, affordable, closed-loop programs to meet the financing demands of businesses and their supply chain partners with simplicity and speed.
The employees, partners, and investors fully understand how Vayana Network operates as it is just as crucial as what they accomplish to create value for all stakeholders. Together, Vayana strives to provide easy, digital access to low-cost financing to every enterprise – from large corporations to MSMEs – to help manage their working capital, grow business and create employment.
Vayana Network- Vision and Mission
Vayana Network was started with a vision to democratize the access to low-cost trade finance to the smallest of enterprises. They believe that for an economy like India to achieve momentum, the millions of hard-working small wheels (i.e. Micro and small businesses) must run smoothly and financing is critical to this.
Vayana’s mission, therefore, is to ensure that every entity on a supply chain, from the largest to the smallest, can access financing affordably and conveniently. They strive to make financing an integral, seamless part of the trade process and not a separate activity.
Through Supply Chain Finance Vayana is looking to address a short-term trade credit gap of $ 260 Bn faced by Small and Micro Enterprises in India.
India has about 63 Mn MSMEs of which only 5% have access to formal sources of financing. The cumulative financing gap faced by MSMEs left out of the formal system, is about $260bn.
SCF market in India today is approx $10 Bn, which is less than 1 % of India’s GDP. In the next 5 years, we expect the market to be roughly 4% of India’s GDP, which is the case today in countries like China. This growth will be backed by the increasing formalization of the economy brought about by GST and E-Invoicing initiatives of the government, RB
[ Sources- IFSC report on Financing MSME, RBI report authored by UK SInha and other sources.]
Vayana Network- Product/ Sevices
Starting from big ‘anchor’ companies at the top of the supply chain, they can detect, analyze and leverage the ‘creditworthy networks’ of downstream buyers, using real-time data. The digital process of onboarding is quick, painless, saving time, effort, and cost
SMEs can access affordable finance easily. A simple one-click process removes friction, enabling high utilization
Banks and FIs gain access to an expanded book from new segments which they could not viably access till now
‘Anchor’ corporates enjoy the benefits of expanded supply chain coverage – predictable cashflows, increased sales, and frictionless supply chain relationships.
And all of this without requiring any change in internal systems and processes.
Vayana’s technology & services platform enables their partner Banks and FIs to build a scalable and profitable portfolio, retain it and grow over time. The entire cycle from sourcing to settlement is managed by Vayana, hence partner institutions pay Vayana a service fee on the financed portfolio. Vayana is also a leading GSP (GST Suvidha Provider) offering a seamless API gateway for Corporates, Institutions, and MSMEs for their GST, EwayBill, and eInvoicing compliance needs; against platform fees.
Vayana Network- Startup Launch
The core emphasis of Vayana Network, when launching the company, was to build a process that is scalable and serves to solve the most critical need of any business i.e. freeing up the cash flow. One of the key needs for this process to run successfully was to create something that is so easy to use that one forgets that it is there.
Initially, a lot of their business was driven via more of one to one interaction, but as they have grown from strength to strength they are now very well entrenched in the psyche of both the corporates as well as their FI partners, who appreciate the know-how and key knowledge we bring to the table for all the concerned parties, thus creating a healthy and meaningful trade network.
Vayana Network- Customers/ Clients
One of the key driving philosophies was to keep the process as simple as possible or as our CEO states “Dal – Chawal will never go out of fashion, as oppose to exquisite continental food that is good but, in the end, you will always crave simple food as it solves for your basic need.” Similarly, there are multiple solutions that are available in the market, but all businesses from large corporates to the SMEs are looking to solve for the key pain area i.e. freeing up their working capital allowing them to do business at a much larger scale and this is where Vayana comes in by managing the entire trade financing network in such a manner that business no longer needs to worry about the credit crunch and concentrate on what they do best, growing the business.
Vayana with its simple & robust processes allows it to onboard large corporates as well as the smallest of MSMEs with equal ease in the shortest possible time thus eliminating long and tedious onboarding processes.
The company is blessed with a strong set of experienced professionals and seasoned entrepreneurs on its Board and advisors like Dr. Marti G Subrahmanyam, Mr. Kannan Ramasamy, and Mr. Kalyan Basu.
Vayana Network- Acquisitions and Mergers
The company is open to acquisition opportunities in allied areas of strategic interest and has already made 2 acquisitions in the last two and a half years. Vayana focuses on lean teams working on some great models/ ideas in the space of facilitating B2B trade and where both teams see a great cultural fitment and commonality of interest. One such acquisition was of SahiGST in 2018 – a leading cloud-based ASP; to further strengthen our GST and E-Way Bill Portfolio. The next acquisition (not yet public) is in the B2B payments space.
Vayana has been recognized as “Fast Learner” Fintech Startup at Fidelity WyAQ Award 2020 and has also won NASSCOM’s ‘Emerge 50’ in the Fintech category in 2019.
Vayana Network- Future Plans
Vayana Network is successfully servicing clients from over 25 industries, further impacting more than 20,000 MSMEs and 300-plus supply chains and processing more than 1.7 million invoices. Vayana has a CAGR of 300 percent, with an organic growth rate of up to 45 percent. The company recently finished financing $USD 5 Bn (Rs 37,000 crores) on their platform.
Currently present in the US, Singapore, Thailand, Malaysia, Vietnam, and Indonesia, the company is targeting either Japan, South Korea, or Taiwan next.
Small businesses are in fact the biggest assets of any nation, especially developing countries. The amount of employment that they generate and hence the ripple effect that it gives to multiple families at different levels helps in the upliftment of the economy as a whole in its self.
This is one of the major reasons why every government put in a lot of effort to boost small businesses. However, 2021 will not be a cakewalk for them due to various reasons. The pandemic and lockdown restrictions only add to their pile of problems.
Long gone are the times when businesses used to plan their events at the beginning of every business year and stick to them. Now due to the uncertainties regarding the intensity of waves, casualties and restrictions in place, it is extremely difficult for these firms to plan their activities to ensure a proper flow of revenue or interactions at least.
The fear of plans being shut down and the resulting economic loss prevents them from planning things at the site of slight improvement as well. This lack of planning further aggravates the uncertainty and adversely affects the companies
Lack of Physicalities
Considering the fact that Coronavirus situations are bleak and uncertain everywhere it is likely that the remote working will be continuing during a larger part of 2021 as well. Although it has proven to be a very effective method, it comes with its own disadvantages. Many small businesses find it difficult to run their business in the absence of off-line interactions especially due to the nature of the kind of business they do.
Technological Divide
The lack of adequate technology has rendered a lot of small businesses rather helpless. The continuous technological advances on the other side further push them back in the race. This technological divide costs small businesses a huge sum of money.
The pandemic further aggravated the situation by creating a circumstance wherein they had no other option but to update their technology. While this has also helped quite a number of small businesses to adopt newer technology which they would have never done otherwise, it has also led to the permanent shut down of many others due to their inability to cope up with this competition.
There is still continued neglect by the government with regard to helping small businesses to bridge this technological divide. And hence it will continue to be a huge challenge for them in 2021 as well.
As most of the economic activities came to a standstill since March 2020, many organisations had to cut down a lot of employees to sustain themselves without permanently shutting down.
Unlike most of the cases, this unemployment was detrimental to the smaller businesses in its self and not just to the employees. On one side they had no other option but to let go of even their most valuable workforces while on the other side it cost them a fortune by letting them go.
With the lack of a proper workforce and the continued financial constraints that these small businesses are facing, unemployment and the loss caused by it will continue to be a challenge for them.
Changing Market
Earlier the changes in trends and the strategies required to stay afloat and even prosper were more far fledged than now. But these days patterns and desires of consumer behaviour are changing so drastically that every business needs to adapt to newer marketing strategies to be active in the industry.
This can be clearly observed with regard to the larger changes that have come to the television industry wherein the patterns of viewership changed drastically post lockdown and almost all businesses had to change their marketing strategies to fit into this new change.
Such a highly dynamic market situation will stunt the growth of small businesses. Unless and until they evolve techniques to shift from one strategy to other in a cost-effective manner the current situation will continue to be hostile for them.
Work-Life Balance
The lack of work-life balance is one of the biggest challenges that is going to affect the productivity of small scale businesses. Earlier people were clearly able to divide their professional and personal life by giving proper time to both.
With the advent of work from home, people had no other option but to mix both of them together endlessly which makes them feel that there is no end to work and there is no time for themselves away. This makes them more burned out.
The varying restrictions across the globe have also affected every component of businesses. Small scale firms being not so established becomes the worst affected. Those companies whose materials are sourced from other states or countries get affected due to the restrictions that are in place there. This lack of uniformity staggers the activity of the firm as a whole.
When production gets affected it has a ripple effect on each and every aspect that follows; up to the delivery of the product to the customer. Improper production also means increased cost. Since the pandemic situation is not completely tackled, small businesses will continue to be at the risk of skewed productions and the confusion and stagnation that follows.
Conclusion
An analysis of all the challenges that small businesses are facing in 2021 brings one conclusion. All of the obstacles can be tackled with effective support from the stakeholders and the government. Addressing the issue of the technological divide is the most important thing to be done immediately.
As far as the restrictions are concerned governments can plan them in such a way that it does not hamper economic activities while controlling the extent of overall movement of the population. The businesses should also adapt to effective mechanisms wherein they can shift their strategies and tools as the business climate demands.
FAQ
What are the challenges of small business?
Finding the right talent, Tax complexity, Cash flow issues and lack of adequate technology are some of the challenges faced by small businesses.
What is one of the common difficulties faced by small business owners?
Lack of cash flow is one of the most common difficulty faced by small business owners.
How many employees should a small business have?
A small business should have 50 or fewer than 50 employees.
