Unique problems and unique demand for cash- Impact of demonetization on these typical characteristics of MSMEs

By:B2B Desk 2016-11-26

Even though micro, small and medium enterprises (MSMEs) are facing some major problems due to demonetization, the government officials share that in the long run, MSMEs will be the ones getting a better access to capital. The last few days saw the banks flooded with money. Due to this high number of deposits, their lending capacity will increase. MSMEs had requested the government to raise the withdrawal limit to between Rs 3 to Rs 5 lakhs, sharing paying their workers daily wages as a major concern. Many exporters have appreciated the decision and termed it as a move that will bring a cleaner economy and an organized way to  approach transactions. On the same hand, the enterprises that have a higher number of unskilled and migrant laborers like those in handicrafts, metal work, weaving, etc. have requested a greater withdrawal limit as they are still paying their workers in cash. We need to understand that the vision of the Prime Minister with this move is to make India a cashless economy and shift the process of payment in cash to the proper bank accounts of the workers. We are hopeful that as the time will pass, the currency position will ease out. The government is taking into consideration the rural areas, keeping their needs in mind. 

It is true that SMEs have unique problems and unique demand for cash, among other things and so is their nature of credit and turnover. With these typical characteristics’, RBI and other banks will be taking into account the kind of support MSMEs require. MSMEs is among the sectors which suffered drastic fall in trade, commerce and business activities due to demonetization. Concerns have been expressed by MSMEs across the length and breadth of the nation. Owners of small businesses in various states have shared that, their sales have dropped 50 to 60 per cent since the demonetisation and they are not receiving stocks. Grocers saw a great dip as either they don’t have the new currency or there is no change. In fact, in this period the lending increased so much, that many grocers did not have the funds to even order new stock. Customers bring the new Rs 2,000 currency note and buys things only worth Rs 250. The grocers are facing trouble in returning the change. The tourist destinations have also seen a drop in sales as their major business comes from the tourists. Even they do not have the cash to buy products from them. These small businesses who are majorly local traders earlier faced strong competition from the e-commerce portals and now demonetization. From retaining their old customers to now growing their customer base, it is a tough battle for them. Customers are avoiding all such places where they have to pay cash. In such a scenario, adding online payment facilities looks like the only solution. However, customers are avoiding shopping at the local markets now due to insufficient cash in the system and local traders do not have an online payment facility.

In states where the business was mostly agro-based, trade is at a standstill. Farmers have been selling the produce at rates almost less than the actual cost of production. This time of the year being a peak time for locations like Goa, the beginning of the peak season is seeing a crash. Most foreigners are cash-strapped. The business territories are seeing a 50-70 per cent dip. Hawkers, street vendors, roadside shops, eateries, retail outlets, and small traders across the country are badly hit. Due to the shortage of Rs 10 to Rs 100 notes they could not do much business. All the cash in hand was used in the very initial days.

MSMEs are now realizing that the biggest mistake they made was not using swiping machine. They never felt the need for it and due to this there has been a reduction in the business. Most of the customers are now looking for options where payment can be made through cards. Nobody wants to stand in long queue in the ATMs and banks. Even the cash that they have in their pocket, they want to save it for the extreme situations. As a result, middlemen, suppliers as well as traders are facing troubles and is giving rising loan defaults and non-payments. Thus, there is widespread distress as demonetization hits small, medium businesses hard, but we are keeping our fingers crossed for the long-term impact!

Comments


cheapest auto insurance Loveland OH
On:17-Apr-2017 12:23 PM
By:sXo7L8yF4LPg
cheap car insurance Winder GA
On:17-Apr-2017 03:26 PM
By:YEABNUYbBrO5
no down payment auto insurance in Portsmouth VA
On:17-Apr-2017 05:02 PM
By:7QyjLwUY3Par
cheap sr22 insurance Columbia TN
On:17-Apr-2017 05:42 PM
By:ubDYdxDqN
best auto insurance in Kansas City MO
On:18-Apr-2017 04:11 AM
By:QSpD9Bd86
auto insurance quotes Fort Walton Beach FL
On:18-Apr-2017 11:12 AM
By:UZcISv9Qq
cheap non owners insurance Mount Vernon NY
On:18-Apr-2017 12:04 PM
By:5skUdCBtm
car insurance riverside
On:18-Apr-2017 05:06 PM
By:CNBZpLsdkNRg
car insurance tullahoma tn
On:19-Apr-2017 01:11 AM
By:WhdBG9hObN
http://www.cerur.org/fundraising-insurance.html
On:19-Apr-2017 06:36 AM
By:NAGIBGfGY9AS
car insurance in memphis cheap car insurance in durham nc
On:19-Apr-2017 11:27 AM
By:eyHpnF6rhLr
csgo lucky wheel how to get free coins kik hack for android
On:20-Apr-2017 06:12 PM
By:obFjstiDbmo
ddtank free coins how to get free coins on agario pc
On:20-Apr-2017 06:18 PM
By:is4ZZRqVB
hit it rich casino dragonfable
On:20-Apr-2017 10:59 PM
By:aF1ssWMY
csgopolygon free coins fix
On:21-Apr-2017 02:34 AM
By:rwZC6Fng5a
madden 16 coin generator no survey ps4
On:21-Apr-2017 03:16 AM
By:35u0QDKtTpa
download fifa 16 coin generator
On:21-Apr-2017 03:26 AM
By:tHSdnfqcAs
free coins on fifa 14
On:21-Apr-2017 04:28 AM
By:YAL85X74O0Vv
madden 16 mut coins hack fifa 14 coin generator android
On:21-Apr-2017 04:50 AM
By:2pxuCKTlJs
pokemon go hack for android donwload
On:21-Apr-2017 07:04 AM
By:M1DhTgrcm8k
madden ultimate team coin generator no survey
On:21-Apr-2017 05:35 PM
By:duLWm7577p4
vegas downtown slots free coins
On:21-Apr-2017 11:58 PM
By:2ozAxhOcL4SI
clash royale free coins and unlimited jems
On:22-Apr-2017 02:53 AM
By:yEUiP0OI
how to get free coins in madden mobile no survey
On:22-Apr-2017 07:59 AM
By:wjLJa1A2i54
hero zero
On:22-Apr-2017 01:35 PM
By:7FEfgR8FlRy
free coins fut 16 free coins for hit it rich casino slots
On:22-Apr-2017 01:48 PM
By:N5HOd9ZIs
fifa 15 coin generator online no survey no download
On:22-Apr-2017 03:40 PM
By:KnuKMGGf
wizard of oz slots zynga free coins
On:22-Apr-2017 03:51 PM
By:xhV19X4fE
cheap viagra
On:22-Apr-2017 05:52 PM
By:AZpPopexWKD
viagra online
On:22-Apr-2017 07:41 PM
By:AarW0pj5y
order viagra online
On:22-Apr-2017 07:43 PM
By:wkUgZlGvUoiW
purchase viagra
On:22-Apr-2017 08:32 PM
By:7TWK4xSbD2r
sildenafil
On:22-Apr-2017 08:48 PM
By:gs7YMUPqYR
online viagra
On:22-Apr-2017 09:45 PM
By:Ae8GXYYLn
order viagra online
On:22-Apr-2017 10:40 PM
By:QwWiy3aT
online viagra
On:22-Apr-2017 11:06 PM
By:Lj6OPAd1B
viagra online
On:22-Apr-2017 11:27 PM
By:GTXpRaBLHssB
buy viagra online
On:22-Apr-2017 11:55 PM
By:nbooY9sOU
generic viagra
On:23-Apr-2017 12:16 AM
By:V2frKxrLh7j7
generic viagra
On:23-Apr-2017 02:07 AM
By:sdsDqZdE
online viagra
On:23-Apr-2017 02:32 AM
By:dqrGjmG4
sildenafil
On:23-Apr-2017 06:04 AM
By:xoULIqpJa
online viagra
On:23-Apr-2017 06:56 AM
By:jDSEYwEFR6f
generic viagra
On:23-Apr-2017 06:59 AM
By:mMZqbyFqYZCj
sildenafil
On:23-Apr-2017 07:10 AM
By:xnsgKaLr
sildenafil
On:23-Apr-2017 10:57 AM
By:P8KqK6zWQ
viagra online
On:23-Apr-2017 12:07 PM
By:SSJOm4Yw1XK
buy viagra online
On:23-Apr-2017 12:53 PM
By:7J2wKcgLDBz
generic viagra
On:23-Apr-2017 02:09 PM
By:voS2viNy
cheap viagra
On:23-Apr-2017 04:20 PM
By:lieGimtYkHKb
http://www.thegreateasternwhiteout.net/bzogigef.html
On:23-Apr-2017 07:00 PM
By:GplJgeXJc
http://www.janganstop.com/ http://www.fbcgroveport.com/cpls.html
On:24-Apr-2017 05:43 AM
By:719GvWDXdjJt
http://www.reignnj.com/ntgnbet.html
On:24-Apr-2017 08:14 AM
By:Dmi0FrQYui
http://www.janganstop.com/pzuc.html
On:24-Apr-2017 09:34 AM
By:Ky7K5Rj5
http://www.route66whitemountaingeotour.com/dfrqjaky.html
On:24-Apr-2017 10:15 AM
By:SGtBizshi
http://www.reignnj.com/ikikzwamz.html
On:24-Apr-2017 11:53 AM
By:fIli0JulsfU9
http://www.cvilledoulas.com/iapgxjlgw.html
On:24-Apr-2017 12:16 PM
By:kEkGMtYYJG
http://www.cvilledoulas.com/voemnlmv.html
On:24-Apr-2017 03:37 PM
By:Rt8xWTmQ2F
free coins
On:25-Apr-2017 01:12 AM
By:yVDsGBtt8n9
free coins on fifa 13 ultimate team ps3
On:25-Apr-2017 06:55 AM
By:abaRhB0Y7
how to get free coins on agario
On:25-Apr-2017 07:40 AM
By:Q8D0AIAbbFb
shuffle
On:25-Apr-2017 10:37 AM
By:oCdWZxcio
free coins
On:25-Apr-2017 11:45 AM
By:Z8WhKHAGCbo
habbo get free coins
On:25-Apr-2017 01:03 PM
By:tXb2Tq11FN2t
http://autoversicherungtech.top/index.html
On:25-Apr-2017 01:57 PM
By:bNvrpFY8f
how to get free coins on csgo double
On:25-Apr-2017 02:10 PM
By:KT96CI0aeT
how to get free coins for hit it rich casino
On:25-Apr-2017 06:46 PM
By:t2ZD9p98mAC
3d sexvilla coin generator
On:25-Apr-2017 09:09 PM
By:xNUe9m9fL4
fifa coin generator free
On:26-Apr-2017 12:24 AM
By:jS0pz7uOoRp
free fifa 15 coins hack madden nfl 25 coin generator
On:26-Apr-2017 01:37 AM
By:q70uZjO6c5
http://kreditvergleichs.top/online-kredit-vergleich.html
On:26-Apr-2017 04:37 AM
By:aT0Cm1qry
free coins on club penguin
On:26-Apr-2017 07:48 AM
By:DC3B4Sws9XCw
generic viagra
On:26-Apr-2017 05:18 PM
By:EWD0FeRft
http://autoversicherungtech.top/index.html
On:26-Apr-2017 08:09 PM
By:wYJag69v6J
generic viagra
On:26-Apr-2017 10:50 PM
By:2tidpQoIqZ
cheap viagra
On:27-Apr-2017 12:26 AM
By:TYccBw4c2P
sildenafil
On:27-Apr-2017 01:01 AM
By:pocOtxBOshIx
generic viagra
On:27-Apr-2017 03:01 AM
By:PpqXIh8ph9J3
viagra online
On:27-Apr-2017 05:06 AM
By:vRpVxywXAz2
buy viagra online
On:27-Apr-2017 06:25 AM
By:uoccv0WEtQ
viagra for sale
On:27-Apr-2017 06:53 AM
By:vmeFFbHS
viagra online
On:27-Apr-2017 07:25 AM
By:PejKgfam
buy viagra online
On:27-Apr-2017 08:21 AM
By:qiePDo5Xw6ej
sildenafil
On:27-Apr-2017 08:32 AM
By:dI4fBnAdJ
viagra online
On:27-Apr-2017 08:45 AM
By:BI8cuh1i
cheap viagra
On:27-Apr-2017 08:57 AM
By:MKqAEBcc
cheap viagra
On:27-Apr-2017 10:51 AM
By:7ivGB7IFH
buy viagra cheap
On:27-Apr-2017 01:54 PM
By:QVwyjr79N
cheap viagra
On:27-Apr-2017 02:52 PM
By:WTqDG6VcvbAZ
purchase viagra
On:27-Apr-2017 03:19 PM
By:cOfI63QMn
viagra online
On:27-Apr-2017 04:14 PM
By:i6vggpuDIIrz
generic viagra
On:27-Apr-2017 05:42 PM
By:Xl99mM61y
viagra online
On:27-Apr-2017 07:50 PM
By:lUWIZo09j9
generic viagra
On:27-Apr-2017 08:13 PM
By:QdwtiEcyh
buy viagra cheap
On:27-Apr-2017 09:16 PM
By:ryMuTNVVn
viagra online
On:27-Apr-2017 09:33 PM
By:f19BGo21XKm
pfizer viagra
On:27-Apr-2017 10:07 PM
By:rZGsR7Kh
cheap viagra
On:28-Apr-2017 01:29 AM
By:JO1ey8no4LP
buying viagra online
On:28-Apr-2017 01:32 AM
By:SUv4nny9nUt8
viagra online
On:28-Apr-2017 04:31 AM
By:Gw1OuUDlQK
http://viagraultraonline.top/
On:28-Apr-2017 05:11 AM
By:W7R47V0D
viagra for sale
On:28-Apr-2017 06:35 AM
By:nPLZ9UIBX
viagra online
On:28-Apr-2017 07:16 AM
By:RTNs6Z0s2
buy viagra online
On:28-Apr-2017 08:04 AM
By:X5MqGUno
buy viagra online
On:28-Apr-2017 10:36 AM
By:c4A3q3ZY
cheap viagra
On:28-Apr-2017 12:45 PM
By:2b37w8hF22
viagra online
On:28-Apr-2017 01:33 PM
By:zGx8oRBbh
sildenafil
On:28-Apr-2017 01:36 PM
By:j9JkjHJUQ
sildenafil
On:28-Apr-2017 02:40 PM
By:I0cxwFkhb
cheap viagra
On:28-Apr-2017 02:45 PM
By:agfiXNRMdTw
buy viagra online
On:28-Apr-2017 04:18 PM
By:Q8JED1ItTCmv
sildenafil
On:28-Apr-2017 04:54 PM
By:2hPS2Uurbl2n
generic viagra
On:28-Apr-2017 09:11 PM
By:avonYv9XO