The micro-small and medium enterprises (MSMEs) of India are facing severe challenges due to high interest rates, collaterals sought by financial institutions and bureaucracy in bank paperwork, says an industry survey.
These challenges act as serious impediments in their way towards growth, said the survey conducted by the Confederation of the India Industry (CII).
MSMEs in India have still not been able to gain a strong foothold, and the sector will be able to fully realise its potential by 2010 with a paradigm shift in business scenario over the next 5-10 years.
On the issue of raising the FDI limit, a whopping 72 per cent of the people surveyed voted against the move.
"Small and medium industries foresee the dominant role of non-traditional source of finance substituting the traditional (banking) sources," the report said.
The survey found out that 37 per cent feel innovation strategy of the MSMEs can only be impacted through transformational change and improvement.