Small and Medium Enterprises (SMEs) is a crucial sector of the Indian economy whose contribution to employment is next only to agriculture. SMEs account for nearly 40% of the total exports and nearly 35% of gross output in the manufacturing sector. Development of SME sector has the potential to achieve the twin goals of growth and equity which often are considered antithetical to each other. However SMEs have always faced severe constraints and the challenging global economic landscape has made matters worse. By all accounts, financing is the most serious problem for the growth of SMEs in India.

A substantial body of research, including some undertaken by CAF, has conclusively established that the SMEs face severe bank credit constraints, forcing them to rely on non-market financing, especially trade credit. However, non-market financing typically involves higher transaction costs as well as interest costs than bank finance. A recent CII survey of SMEs identifies ‘delay in realization of receivables’ as the most important challenge faced by the SMEs. The same survey also finds that the SME confidence level is currently at an all-time low. This symposium is a step toward understanding the challenges and finding some remedies.

The symposium offers a platform for various stake holders like banks, exchanges, Government, investor community rating agencies and industry representatives to discuss issues pertaining to SME financing and come out with creative solutions. The Panel discussions will focus not only on improving access to formal finance but also trade financing. The goal is to come out with implementable suggestions to improve the current state of affairs of SME finance and take them up with the appropriate authorities for implementation.