Month: October 2023

27
Oct
2023
Catalysing MSE-CDP: Analysing Funding Dynamics and Impact, 2019-23

Catalysing MSE-CDP: Analysing Funding Dynamics and Impact, 2019-23

In India, the Micro and Small Enterprises – Cluster Development Programme (MSE-CDP) is an essential program aimed at encouraging the growth and development of small-scale enterprises. The program’s effectiveness is dependent on the allocation and utilization of funding for the improvement of these businesses. This blog delves into the year-by-year breakdown of money allocated and actual spending under MSE-CDP from 2019-20 to 2022-23.

Fund allocated under MSE-CDP from 2019-2023

(The Micro and Small Enterprises – Cluster Development Programme (MSE-CDP) is an Indian government effort aimed at promoting the growth and development of the country’s small and micro-sized businesses. It accomplishes this by grouping small enterprises into clusters, giving financial assistance and resources, and training to help them grow. The program aims to make these small businesses more competitive and sustainable, thereby contributing to India’s economic growth and employment creation.)
MSE-CDP Funding Analysis: 2019-20 to 2022-23

money allocated & actual spending under MSE-CDP from 2019-20 to 2022-23

  •  2019-20: Laying the Foundations

Funds Allotted: The program received a major allocation of 227.9 crores in the fiscal year 2019-20. This grant demonstrated the government’s commitment to strengthening the micro and small business sectors.

Funds Released/Spent: An impressive 226.339 crores were disbursed, indicating that the allocated funds were used efficiently. This practically 100% utilization indicated a promising start to the MSE-CDP journey for this year.

  • 2020-21: Maintaining Momentum

Funds Allocated: The government continued to fund MSE-CDP in 2020-21 by allocating 116.28 crores, which was marginally less than the previous year.

Funds Released/Spent: The allocated funds were completely spent, demonstrating an unrelenting commitment to the program. This complete utilization kept the momentum going.

  •  2021-22: A Dip in Spent Funds

Funds Allocated: The allocation for 2021-22 was 156.5 crores, indicating a renewed interest in the development of micro and small firms.

Funds Released/Spent: However, there was a significant decrease in funds spent, with only 135.59 crores used. While the allocation was significant, the expenditure was slightly lower than the previous year, possibly signaling the need for more efficient spending or a re-evaluation of program aims.

  •  2022-23 (up to 15 March 2023): Navigating Challenges

Funds Allocated: As of March 15, 2023, 120 crores have been allocated for the MSE-CDP year 2022-23. The allocation was lower than in previous years.

Funds Released/Spent:  Up to this date, 105.35 crores have been spent, indicating that a significant percentage of the allocated funds has already been put to good use. However, it should be noted that the fiscal year was not yet over.

 Important Takeaways

  1. Consistent Financial Assistance: The government has constantly provided financial assistance to MSE-CDP, albeit with minor fluctuations in allocations.
  1. Efficient Spending: During the first two years (2019-20 and 2020-21), practically the whole allotment was spent, indicating efficient use of money.
  1. Future Challenges: The decrease in funds spent in 2021-22 raises concerns about the program’s efficiency and whether it requires changes to effectively accomplish its objectives.
  1. Continued Commitment: As of March 15, 2023, a large percentage of the budget for 2022-23 has already been spent, suggesting a continued commitment to MSE-CDP.

In conclusion, a year-by-year analysis of MSE-CDP funds allocated and spent from 2019-20 to 2022-23 reveals both accomplishments and challenges.” It emphasizes the importance of not just budget allocation but also the critical requirement for their proper utilization in promoting the growth of micro and small businesses. These companies are vital to Tezi Bharat, India’s fast-developing economy. This assessment also highlights the need for potential tweaks and revisions to ensure the program’s long-term success in supporting economic development and creating job opportunities in the nation’s ever-changing path.

Share
Posted by blog-admin in Industry Update, 0 comments
18
Oct
2023
Exploring Financial Horizons: A Comprehensive Guide to Types of Business Loans in India

Exploring Financial Horizons: A Comprehensive Guide to Types of Business Loans in India

A considerable quantity of capital is required to start, run, or expand a business. There are numerous business loan solutions accessible in India to meet the different financial needs of entrepreneurs. There is a loan suited for you whether you want to purchase new equipment, cover working capital expenses, or enhance your start-up. In this article, we’ll look at some of the most prevalent forms of business loans in India and offer advice on how to choose the best one for your individual needs.

  1. Term Loan

Term loans are an important financial tool for companies. They provide a lump sum payment that is returned in fixed monthly installments over a certain length of time, usually one to five years. These loans are versatile and can be utilized for a variety of objectives, including the purchase of equipment, the expansion of inventory, and the financing of working capital. They are a fantastic alternative for companies with well-defined financial objectives and the ability to make regular payments.

  1. Working Capital Loan

Working capital loans are intended to fund the day-to-day operations of a firm. These short-term loans give the required cash to fulfill payroll, purchase merchandise, or finance marketing efforts. They are typically returned within a year, making them excellent for filling short-term cash flow deficits.

  1. Equipment Loan

An equipment loan is a good option for businesses wishing to purchase specialized equipment. Because the bought equipment frequently has a longer lifespan, these loans have longer repayment terms. Equipment loans enable you to invest in assets critical to your business without jeopardizing your working capital.

  1. Invoice Financing

Invoice finance is a useful tool for organizations that have unpaid invoices. It allows you to borrow money against your outstanding bills, providing you with an immediate cash inflow. This is especially useful if the business has a long sales cycle or needs funding to sustain quick expansion. Invoice financing keeps your cash flow stable even when clients take their time paying their bills.

  1. Line of Credit

A line of credit is a revolving loan that gives a pre-approved credit limit to businesses. You can withdraw funds as needed, and the interest is only paid on the amount borrowed. It’s a versatile financial tool that may be used for everything from bridging short-term shortfalls to capitalizing on fresh opportunities.

  1. Government-Backed Loans

The Indian government provides a variety of credit programs to help small businesses and entrepreneurs. When compared to traditional loans, these loans often have lower interest rates and more flexible payback terms. They are intended to stimulate economic growth and are worth investigating, especially if you match the eligibility requirements.

Factors to Consider When Choosing a Business Loan

Selection of the ideal business loan requires careful evaluation of several crucial factors:

1. Purpose: Specify the particular reason for which you require the loan. Different loans are designed to meet specific needs.

2. Loan Amount: Determine how much funding you will need for your business. Borrow only what you need to save money.

3. Repayment Terms: Determine your ability to make monthly payments and select a loan with terms that fit the cash flow of your business.

4. Interest Rate: Interest rates vary greatly amongst lenders. Shop around for the most affordable prices that meet your budget.

5. Eligibility Criteria: Understand and meet the eligibility requirements for each loan.

Additional Tips for Choosing a Business Loan

  • Credit Score: The interest rate you obtain is influenced by your credit score. A higher score frequently results in more favorable terms.
  • Pre-Approval: Getting pre-approved provides you with a better idea of how much you can borrow and what interest rate you can get, which can help you negotiate better conditions.
  • Compare offers from numerous lenders to find the best fit for your company. Examine the interest rates, repayment terms, and any connected expenses.
  • Read and understand the terms and conditions carefully before signing any loan arrangement. If necessary, seek legal or financial assistance.

Here’s a table showcasing the year-on-year disbursal growth and expected growth for FY2023-24 of each loan type:

Here's a table showcasing the year-on-year disbursal growth and expected growth for FY2023-24 of each loan type, along with the sources:

Source: MFIN Micrometer, IBA Annual Report, IBA Quarterly Statistical Report, RBI Annual Report and RBI Monthly Bulletin

The financial landscape is diverse and dynamic for Indian enterprises. Tezi Bharat, the growing national initiative to boost Indian industry, is an important thread in this economic tapestry. If you have a strong understanding of the available loan choices and carefully analyze your business’s particular demands, you can make informed decisions to obtain the appropriate money. Whether you’re a first-time entrepreneur, a seasoned business owner, or a visionary looking to expand, the right business loan can be a key stepping stone to your success.

Share
Posted by blog-admin in Business Loans and Financing, 0 comments
13
Oct
2023
Leveraging Technology for Business Efficiency: A Roadmap to Success

Leveraging Technology for Business Efficiency: A Roadmap to Success

Staying competitive and profitable in today’s fast-paced business market takes more than just a great product or service. It necessitates efficient operations and the flexibility to quickly adjust to changing market conditions. Using technology is one of the most effective methods to accomplish this. In this blog post, we’ll look at how embracing technology can boost your company’s efficiency.

Technology’s Impact on Business Efficiency

Technology has transformed the way we do business. It provides a plethora of benefits that can revolutionize your operations, from automating tedious procedures to enabling data-driven decision-making. Here’s how it’s done:

1. Process Automation

The automation of repetitive work is one of the most immediate benefits of technology. Whether it’s addressing customer questions, managing payroll, or tracking inventory, automation allows employees to focus on high-value activities that require creativity and problem-solving. CRM software, accounting software, and workflow automation platforms, for example, can help you optimize business processes and eliminate human error.

 2. Data Analytics

Data is the lifeblood of modern business. Leveraging technology for data analytics can help you make informed decisions. By analyzing customer behavior, market trends, and internal performance metrics, you can identify opportunities for growth, optimize your supply chain, and tailor your marketing efforts. Business Intelligence (BI) tools and Data Analytics platforms are indispensable for this purpose.

 3. Cloud Computing

Cloud computing has transformed the way businesses store and access data and apps. It is scalable, adaptable, and cost-effective. Your team can collaborate from anywhere using cloud-based solutions, and you can scale your resources up or down as needed. This not only saves money but also ensures that your business can quickly respond to changes.

 4. Enhanced Communication

Every successful business relies on effective communication. Technology provides a variety of methods for increasing internal and external communication. Email, instant messaging, video conferencing, and collaboration technologies allow your staff to collaborate regardless of physical location. Chatbots and virtual assistants powered by AI can improve consumer interactions and assistance.

5. Inventory Management and Payment Gateway Integration

  • Inventory Management:

Technology has the potential to revolutionize inventory management for organizations involved in manufacturing or retail. Inventory tracking solutions that are automated can help you check stock levels in real-time, estimate demand, and decrease waste. This not only saves money but also assures that important products are never out of stock.

  • Payment Gateway Integration:

Integrating a secure and efficient payment gateway into your inventory management system is crucial for automating the buyer journey. This integration ensures that customers can make payments seamlessly during the buying process, enhancing the overall experience.

6. Cybersecurity

With a greater dependence on technology, safeguarding your digital assets is critical. Cybersecurity technologies and practices protect your data, the data of your customers, and your brand. Investing in strong cybersecurity measures isn’t simply a nice idea; it’s a commercial must.

Using Technology to Improve Business Efficiency

Now that we’ve addressed the advantages, let’s look at how to properly implement technology:

1. Evaluate Your Needs

Begin by reviewing the business’s operations and identifying places where technology might help. Sort solutions according to their possible impact on efficiency.

2. Select the Best Tools

Conduct research and select technology solutions that meet your specific goals and budget. Scalability should be considered to support future expansion.

3. Employee Training

Invest in training to guarantee that your team can effectively use the chosen technology. This lessens resistance to change while increasing the advantages.

4. Data Protection

Implement strong cybersecurity procedures to protect the business and its customers’ data. Update your systems on a regular basis to repair vulnerabilities.

5. Continuous Improvement

Technology is rapidly evolving. Keep up with the newest trends and evaluate whether your current technology stack matches your changing demands.

6. Compliance with Data Privacy

If your business collects and keeps customer data, follow data protection requirements to prevent legal problems and maintain confidence.

Conclusion

Using technology to improve business efficiency is not just a wise strategy; it is also an essential aspect of success in today’s fast-paced business environment.

You can optimize your operations, improve customer experiences, and position your business for long-term success by automating procedures, using data, and embracing communication tools.

In this Tezi Bharat era, where the spirit of a growing India is apparent, your MSME’s technological transformation is about being a part of a robust and dynamic ecosystem that is defining the nation’s future. Embrace technology today to be a significant contributor to the nation’s Tezi Bharat path to a brighter and more affluent future.

Share
Posted by blog-admin in Technology and Automation, 0 comments
06
Oct
2023
Unmasking India’s Hidden Economic Powerhouse through Rs 1.5 Lakh Crore in Credit Card Spending

Unmasking India’s Hidden Economic Powerhouse through Rs 1.5 Lakh Crore in Credit Card Spending

Introduction

In a remarkable testament to India’s evolving financial landscape, credit card spending has surged to a historic milestone, reaching Rs 1.5 lakh crore in August 2023. This achievement not only underscores the financial prowess of the nation but also signifies a pivotal moment in India’s rapid growth story, known as “Tezi Bharat” or “Rapidly Growing India.” This article explores the driving factors behind this historic milestone and the broader implications for India’s economic trajectory.

The E-commerce Boom: Fueling India’s Credit Card Spending

The E-commerce Boom: Fueling India's Credit Card Spending

The heart of this financial surge lies in the unprecedented growth of India’s e-commerce industry. Consumers across the country are increasingly turning to online platforms for their shopping needs, attracted by convenience, variety, and competitive pricing. The ongoing digital transformation and the impact of the pandemic have accelerated this shift. Consequently, more and more Indians are utilizing their credit cards for online purchases, contributing significantly to the milestone.

Convenience and Security: Credit Cards as Preferred Payment

Credit cards offer a myriad of benefits, making them the preferred choice for many. The flexibility to make purchases and defer payments, especially during seasons of discounts and offers, is a significant allure. Moreover, credit cards are equipped with robust security features such as fraud protection and zero-liability policies, making them a secure choice for online transactions.

The Role of POS Transactions: Transforming In-store Shopping

While e-commerce transactions have played a pivotal role, we must not overlook the surge in point-of-sale (PoS) transactions. With the expansion of digital payment infrastructure and government initiatives promoting cashless transactions, more merchants are now accepting credit cards for in-store purchases. This shift has encouraged consumers to rely on their credit cards for everyday expenses, further contributing to the overall surge in credit card spending.

Financial Inclusion: Empowering a Wider Population

The growth in credit card spending reflects an increase in financial inclusion across India. As more individuals gain access to credit cards, they can leverage formal credit systems, build credit histories, and manage their finances more effectively. This democratization of credit promises long-term positive impacts on the economy by encouraging responsible financial behavior and fostering economic growth.

Changing Transaction Landscape: Numbers Tell the Story

The transaction landscape has undergone remarkable changes. Point-of-sale transactions surged to 152.1 million in August, up from nearly 143 million in July. Similarly, credit card transactions on e-commerce platforms rose to 138.5 million, compared to 134.3 million in July. Collectively, these figures resulted in a total volume of 291.4 million credit card transactions in August, up from 277.8 million in July.

Issuer Performance: The Competition Drives Growth

Among the leading credit card issuers, American Express stood out with an impressive 10.1% month-on-month increase in spending. On an annual basis, spending on American Express cards rose by nearly 35%. In contrast, HDFC Bank observed a marginal 0.1% month-on-month dip in credit card spending in August. SBICards and Payment Services, India’s sole listed credit card issuer, reported robust growth of nearly 6%, reaching Rs 27,462 crore in spending. ICICI Bank’s credit card expenditures also showed commendable growth, rising by nearly 3% to a total of Rs 26,632 crore in August. Meanwhile, Axis Bank’s credit card spending experienced a modest 0.5% increase, reaching Rs 17,789 crore.

Cards in Circulation: A Growing Financial Ecosystem

The total number of credit cards in circulation increased to 91.3 million as of August 30, up from 89.9 million at the end of July. This expansion signifies not just a surge in plastic but, more importantly, an increase in access, financial empowerment, and the inclusion of millions in the formal credit ecosystem.

Conclusion: Tezi Bharat’s Growth Story Unfolds

As we reflect on the milestone of Rs 1.5 lakh crore in credit card spending for August 2023, we witness the unfolding narrative of a rapidly growing India, or “Tezi Bharat.” This monumental achievement, marked by a 2.7% month-on-month increase and a staggering 32.2% year-on-year growth, signifies more than just a financial milestone; it symbolizes the dynamic transformation of India’s economic landscape.

Tezi Bharat is a testament to the country’s resilience and adaptability. It’s a tale of consumers embracing digital solutions, e-commerce platforms flourishing, and the increasing use of credit cards for everyday transactions. The convenience, security, and expanding financial inclusion that credit cards offer have played pivotal roles in this narrative.

In this era of changing transaction landscapes, where point-of-sale transactions surged to 152.1 million and e-commerce transactions reached 138.5 million in August, Tezi Bharat is not just a catchphrase; it’s a reality. India’s financial ecosystem is evolving at an astounding pace, presenting opportunities and challenges that shape the nation’s future.

Among leading credit card issuers, American Express’s remarkable 10.1% month-on-month increase stands as a testament to Tezi Bharat’s financial dynamism. HDFC Bank’s marginal dip is a reminder that growth often involves brief pauses, but institutions like SBICards, ICICI Bank, and Axis Bank continue to propel the nation’s financial engine forward.

Tezi Bharat’s story also unfolds in the number of credit cards in circulation, which increased to 91.3 million in August. This growth isn’t just about plastic; it’s about access, financial empowerment, and the inclusion of millions in the formal credit ecosystem.

So, what lies ahead for Tezi Bharat? The curiosity about India’s growth story intensifies. What sectors will lead the charge, and how will collaborative partnerships between banks and non-banking entities reshape the financial landscape? The rise of RuPay credit cards on the unified payment interface hints at exciting possibilities.

As Tezi Bharat’s journey continues, it underscores the importance of balance—between convenience and financial prudence, between growth and responsibility. India’s credit card spending milestone is a stepping stone in this journey, promising a brighter, more inclusive, and economically vibrant future for the nation.

Stay tuned as Tezi Bharat continues to unfold its narrative of growth, innovation, and prosperity on the global stage. The story of India’s remarkable transformation is just beginning, and we are all eager participants in this extraordinary journey.

Share
Posted by blog-admin in Industry Update, 0 comments
04
Oct
2023
The Rise of Cashless and Contactless Payments in India

The Rise of Cashless and Contactless Payments in India

In a world that’s rapidly evolving, one thing is clear: cashless transactions and contactless payments are quickly becoming the new norm in India. This paradigm shift is driven by a convergence of factors, including the government’s enthusiastic push towards digital payments, the flourishing e-commerce sector, and the transformative impact of the COVID-19 pandemic.

Current Landscape

As of January 2023, digital transactions in India have soared to an impressive 803.6 crore, boasting a total value of ₹12.98 lakh crore. These figures represent a remarkable year-on-year growth of 69% in volume and 53% in value.

Popular Payment Method in India

Notably, the **BHIM UPI (Unified Payments Interface)** stands out as the most popular digital payment method in India, commanding a commanding share of over 40% of all digital transactions.

But it’s not just digital transactions that are on the rise. Contactless payments are also gaining significant traction in the country. Between December 2018 and December 2021, there was a staggering six-fold increase in the number of contactless transactions.

Recent Trends

Recent statistics underscore the rapid evolution of payment methods in India. A report by Worldline India reveals that contactless payments accounted for a notable 16% of all card transactions in December 2021, a significant jump from the mere 2.5% recorded in December 2018. Additionally, a study conducted by Visa found that a whopping 67% of Indian merchants now accept contactless payments.

Visa Study on Contactless payment

Further underlining this digital transformation, the Reserve Bank of India’s Digital Payments Index (DPI) for March 2023 reached an impressive 305.52. This signifies a remarkable surge in the adoption of digital payments across the nation.

Driving Factors

Several key drivers have fuelled the remarkable growth of cashless and contactless payments in India:

Driving factors of contactless payment
  • Government Initiatives

The Indian government has spearheaded a slew of initiatives aimed at promoting digital payments. These include the trailblazing Digital India program, the user-friendly BHIM UPI app, and the highly successful RuPay card scheme.

  • Rise of E-commerce

The e-commerce sector’s phenomenal growth has played a pivotal role in driving cashless transactions. Virtually all online merchants now accept digital payments, making it more convenient for consumers.

  • COVID-19 Pandemic

The onset of the COVID-19 pandemic acted as an unexpected catalyst, accelerating the adoption of cashless and contactless payments. With health and safety concerns at the forefront, people increasingly sought ways to minimize contact with physical currency.

Benefits

The advantages of cashless and contactless payments are manifold:

Benefits of Contactless payment
  • Convenience

These payment methods offer unparalleled convenience. Payments can be swiftly and effortlessly executed via smartphones or cards, eliminating the need to carry cash.

  • Security

Cashless and contactless payments are significantly more secure than cash transactions. The risk of theft or loss is greatly reduced.

  • Transparency

These methods provide transparent records of transactions, facilitating budgeting and accounting processes.

  • Financial Inclusion

Cashless and contactless payments have the potential to promote financial inclusion, bringing more individuals into the formal financial system.

Challenges

Despite the remarkable growth, there are still challenges to overcome:

Challenges of Contactless payment
  • Lack of Awareness

Many individuals, particularly in rural areas, remain unaware of the benefits associated with cashless and contactless payments.

  • Limited Infrastructure

While the number of merchants accepting digital payments is growing, there are still pockets, especially in smaller towns and villages, where digital payment infrastructure is limited.

  • Security Concerns

Some people harbor reservations about using cashless and contactless payments, citing concerns over security.

Conclusion

Cashless transactions and contactless payments are undeniably becoming the new norm in India. Driven by government initiatives, the burgeoning e-commerce sector, and the lessons learned from the COVID-19 pandemic, their adoption is set to continue surging. India is rightfully proud of this Tezi Bharat (Fast India) journey in digital finance. While challenges remain, the future promises a more efficient, secure, and inclusive financial landscape for all Indians. Embracing these innovative payment methods is not just a trend; it’s a step towards a more connected and digitized future.

Tezi Bharat

Leave a Reply

Share
Posted by blog-admin in Industry Update, 2 comments