Sunday, March 20, 2016

MICRO SME GROWTH SHIFT FROM CREDIT GROWTH TO BUSINESS GROWTH

In continuation to my previous two articles related to poverty alleviation and entrepreneurship, I broadly found in my research that there is deep flaw in the financial institution on policy frame work.  It’s time for applied Management science followed with Business growth monitoring and assisting for the Micro SME and SME shifting from the traditional mechanism of credit disbursement growth.  Yes credit growth measurement for business growth is a wrong tool for the society and its needs modification under these times. Micro SME segment is an important part to the world economy particularly in times when poverty reduction and bridging gap of income inequalities comes into play. Credit growth is the key factor being taken care in financing world where as growth of an Micro SME or an SME is neglected. Growth of an Micro SME is a key factor for the growth of an economy. The financial crisis which has started from 2008 has created immense pressure on the entrepreneurship as they drying out of funds. Financial crisis have forced many teenagers to drop their schooling become a helping hand to the family. They are looking or dreaming to start something f their own as employment market is also down. Large part of the society is under the threat of financial crisis and this has lead to a significant affect on the Micro SME segment. Financial crisis has affected CRS activities, have affected NGO’s as they are getting very low levels of funding as donation and further Banks are reluctant to spend.

 Global entrepreneurship and Micro SME segment have no other alternative but to look for projects which are based of capitalism theory where Private investors can be introduced. This kills the MICRO SME segment. Many entrepreneurs are not getting flourished. Social causes are being exploited in order to get credit.  We don’t need banks we need someone to understand the viability of an project and also look into the day to day activity of an Micro SME and SME segment so that their business plans don’t flop and neither their dreams are shattered. We forget that every death of an dream cost the economy in terms of multifaceted aspect among them creation of employment is the biggest. MICRO SME and the journey towards SME is the key area where management institutes and financial institutes should come together to design and frame the success of an SME or a Micro SME on an individual basis. This might sound lunatic but the fact is that we need to form small organization where management science and financial institutions comes together to develop this success recipe.  The biggest advantage of these bodies coming together will be that Micro SME will get knowledge and financial strength together. Well a Private Investor does same thing when he come into play.

My point is that why to go for exploitation of resources when government should form these organizations to look over the SME business growth and not on credit growth. The biggest mistake that many economies have been doing is on the credit growth and not on the proper returns or outcomes from those credit growths. Looking forward for viable business creation should be policy of these financial institutions and hence management science institutes who spend billions at the back of Research and Development should come ahead with application of the same for the benefit of Micro SME and SME segment. Lease not that we are no longer in the world where management education results gets maximum benefit from these new management concepts application.

We need this organization to be formed under the surveillance of the government so as to keep check on the future policy frame work which will help the Micro SME to grow business. The government and the economy both will benefit as they will work on growth of business and not on credit growth to the Micro SME. Mere disbursement of funds is not sufficient what is required is bring these MICRO SME entrepreneurs into the growth of the economy. Disbursement growth of credit and efficient frame work of subsidies will not help the dreamers to dream big. Private and Government should form these organization at the zone, district levels so that   Micro SME and SME segment is being monitored for growth. It has been often that they lack strategies for growth which often leads to close down of business. This leads to loss to the nation through the banking segment. We don’t need disbursement growth we need growth of employment through MICRO SME and SME.

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