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Our Bureau

Mumbai, Dec. 23 About two lakh small and medium enterprises across the country are in the danger of becoming sick units in the next fiscal, due to the global economic slowdown, said Mr Chandrakant Salunkhe, President, SME Chamber of India.

In 2007-08, about 1.14 lakh SME industries have become sick and the number is likely to increase next fiscal, he said, while speaking on the sidelines of a conference on SME finance here on Tuesday.

SME units are seeing cancellation of orders from overseas clients in countries like Europe, North America and South America and the impact will be felt more after March 2009, Mr Salunkhe said. Among the worst hit will be companies in sectors such as auto components, food processing and manufacturing and equipment manufacturers.

These companies are also facing other hurdles such as lack of funds, lack of marketing assistance, lack of knowledge and information about the various schemes announced by the government and the Reserve Bank of India, he pointed out.

The Indian SME segment which employs about 1 million people on an average, in a year, is also likely to see more layoffs next fiscal, he added.

Although the Government and the RBI have announced several measures to provide more loans to the SME segment, it has been noticed that often at the branch level the bank employees are not aware of these schemes.

“Banks should inform their customers about these schemes. But often we have to tell the employees at the branches about the schemes,” Mr Salunkhe said.

The SME Chamber of India has also made a representation to the Government and the Indian Banks’ Association for giving loans to micro and tiny industries at 7 per cent and to small and medium enterprises at 9 per cent, he added.

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