India has emerged the most optimistic country about economy this year, according to the HSBC SME Asia-Pacific Business Confidence Survey released across the region on Thursday.
The Nielson Group conducted the survey with 1,800 small and medium enterprises on behalf of HSBC, across nine countries. Indian SMEs expect the economy to improve significantly with 70 per cent of them voting for it, followed by 9 per cent saying it will improve moderately and 19 per cent saying the economic growth will maintain the same pace.
However, only 36 per cent of them said they plan to invest while 64 per cent said they have no such plans. “This does not mean that there will be no need for credit or that they will not grow. Probably what they would need is working capital,” said Puneet Chaddha, head of commercial banking, HSBC, in India. The recruitment expectations from the sector is also low with 54 per cent saying they do not plan to hire more staff this year.
The HSBC survey also said that Indian SMEs are highly optimistic about growth in cross-border trade with China and also rest of the world. Chaddha said that the bank has significant ambitions in the SME space and has designed unsecured loan products for this segment. What was once a public sector domain, the credit to SME segment has attracted attention of private as well as foreign banks as 95 of enterprises in India are SMEs.
Among the other countries surveyed Indonesia diplayed a trend similar to that of India and only Taiwan was not so upbeat of economic prospects, though it was highly positive on growth in cross border trade with China.