'SMEs must tap alternative sources of finance'

NEW DELHI, INDIA: In order to mitigate the situation of limited availability of capital, the small and medium enterprises (SMEs) should tap alternative sources of finance including venture capital, said Ramnath Pradeep, chairman and managing director of Corporation Bank.

“Non-availability of appropriate technology at cost effective terms is major dampener for SMEs. To remedy this problem the SME should go in for use of shared technology like cloud computing,” Pradeep said during the 'Power Lunch' organised by PHD Chamber here on Saturday.

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The banking sector is also contemplating the use of a single ATM facility which would be shared by all. Another problem is that of marketing for which SME would need to develop new markets.

He added that the non-availability of adequate and timely bank finance is a major problem for SMEs. The banks insist on proper papers and documents which the SMEs find difficult to provide.

In this context, the bank should think of having a one-stop-shop wherein banks should advise SMEs on all matters relating to finance including preparing project proposals.

In fact, there should be a time limit for raising queries and a time limit for clearing the proposal, Pradeep said.