Entrepreneurial business still feels under-supported by governments

A staggering 56% of Small and Medium Enterprises (SMEs), propelling the growth in India, feel that their interests are overlooked by the Government. However, the sentiments among entrepreneurs globally on governmental support far outstrip Indian figures with nearly 75% of business owners feeling that interests of small and medium-sized enterprises are typically neglected by the Government.

With SMEs accounting for 45% of industrial output, employing over 60 million people and expected to produce 22 % of the economy by 2012, the findings of Regus survey could have strong implications on nation’s economy.

The survey canvassed the opinions of over 5,000 entrepreneurs in 78 countries asking them about their recent revenue and profit trends, along with their main concerns and causes of stress in the past years. These latter indicators form the basis for the report’s Entrepreneurial Environment Index, reflecting entrepreneurs’ feelings as to how easy it is to do business in their country. For India in particular, the global index revealed a well above average rating of 167 points compared to the global average of 100.

74% of respondents globally and 87% in India declared that banks should be forced to lend more to entrepreneurial ventures and small businesses, highlighting that access to credit is an issue for entrepreneurs. 86% of entrepreneurs globally and 90% in India also stated that government venture capital funds should be available to support entrepreneurs and their business initiatives. Indicating that maintaining cash flow is an issue for small businesses globally, 72% of respondents globally and 82% in India declared that legal penalties should be introduced for late payment of invoices.

Madhusudan Thakur, Country Head of workspace solutions provider Regus, comments: “In spite of its massive importance to national economy, the SME segment struggles to get its voice heard. In the aftermath of the global down turn, this key sector for the economy has had difficulties securing capital and maintaining cash flow.

“In India in particular, although satisfaction with government intervention is higher, access to working capital is felt to be an issue by many entrepreneurs. The government, the Reserve Bank of India and Public Sector Banks have therefore taken a number of steps to provide SMEs with stimuli ranging from extending the loan limit under the Credit Guarantee Scheme, increasing guarantee cover, creating an advisory to Central Public Sector Enterprises to ensure prompt payment of bills and a reduction of interest rates for micro enterprise borrowing.”