Leading SMEs of India 2022

7 KEY CHALLENGES Dearth of Skilled Talent Inefficiencies in small businesses Lack of Easy Access to Low-Cost Trade Finance Exploring Overseas Markets Digitalisation and Innovation Sustainability Challenges A) Dearth of Skilled Talent Most MSMEs and SMEs are dependent on locally available manpower, which is usually unskilled, for running their operations, partly because of insufficient funds to invest in machinery. On the other hand, many of them migrate towards greener pastures after receiving on-the-job training and the requisite experience, joining large scale companies for better career prospects. Frequent attrition of talent from cash-strapped businesses is a major cause of concern across the industry. With no big brand name and fat paycheques to keep employees motivated, SME and MSME players often find themselves struggling to attract, retain and manage skilled labour. B) Inefficiencies in small businesses Ahost of factors, such as poor infrastructure, inefficient datamanagement, idle inventory, and improper supply chain management, result in inefficiencies in operations and business processes. Besides, the scale of production being limited, small andmedium- sized businesses are further saddled with high costs of operations. Due to lack of funds, these businesses are compelled to depend on labour-intensive processes or rely on outdatedmachinery. Lack of easy access to cheap funds means such businesses typically shy away from innovative technologies. All these factors hinder the overall production efficiency and subjugate the product or service quality. C) Lack of Easy Access to Low-Cost Trade Finance Finance is the lifeblood of any business. But the lack of easy and timely access to low cost finance has been hurting the growth of small and medium sized businesses. According to a report by the UK Sinha Committee dated June 2019, the credit gap in the SME sector is at around ` 20-25 trillion. Even as a large number of small businesses are at risk of turning non-operational due to the paucity of timely and affordable credit, most lenders and financial institutions view such businesses as high-risk borrowers. As a result, lenders impose strict conditions and collateral rules on small and medium sized businesses, further exacerbating the problemof sourcing funds for these players. Moreover, there are regulatory hurdles and procedural delays that further add to the woes of small businesses. Dun & Bradstreet