'There is a liquidity crunch and banks are unwilling to lend to MSMEs'

Q&A: Rajeev Karwal

The SME sector has been the hit the worst by the global economic downturn. Milagrow, a venture catalyst firm focused on micro small & medium Enterprises, is holding a two-day World SME Conference 2008 in New Delhi this week. The conference will address the various issues facing this sector along with finding solutions for its sustainability, says Rajeev Karwal, founder director of Milagrow, in a conversation with Sapna Dogra Singh. Excerpts:

When did the idea for this conference come up?
It was about a year ago in December 2007, at a workshop on access to China for small and medium enterprises that this idea was mooted. Participants in the workshop said there had been no international event dedicated to SMEs. Other international conferences like India Economic Forum are too big for the SMEs.

What is the theme of the conference? What areas will it cover?
The theme of the conference is get, set and grow. The conference will cover the entire policy framework related to SMEs. At the conference, we would be releasing research studies and white papers. A report on sick MSMEs based on a study of 3,000 SMEs in 11 clusters in four states will be released. We will also relate a white paper on the impact of slowdown on exporters.

Who is likely to attend this conference?
Over 200 people are likely to attend, including international delegates. There are 50 speakers and panelists, 20 of whom are international speakers. Variety of subjects related to SMEs will be debated. The government will be represented by Minister of State for Industries and Commerce Jairam Ramesh, Mahabir Prasad — cabinet minister, ministry of MSME, Dinesh Rai, secretary, ministry of MSME , Sudha Pillai, secretary, ministry of labour and employment, among others.

Would the government implement the recommendations arising from the conference?
The Ministry of MSME is supporting the event. They have said the policy recommendations that the conference comes up with will be considered. Also, our research studies and papers have made recommendations for the sector.

What are the issues facing the SMEs today?
Finance is a big issue as there is a liquidity crunch and banks are unwilling to lend to MSMEs. The sector requires help in all areas like skill building, ancillary help etc. Today there is no apex body to take up their case and they are facing intense competition from both India and abroad.

Is the timing of this conference opportune considering many events are being postponed in the wake of the Mumbai terror attacks?
I was really worried whether delegates, especially from abroad, would turn up for the event. However, I was pleasantly surprised when they said they empathised with India and would come to attend the conference. Also, SMEs are suffering due to the economic slowdown. This conference is thus taking place at the right time.