A survey was conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI). It was revealed from the study that about 94 percent of the Small and Medium Enterprises (SMEs) were hit severely and moderately by the economic slowdown.
However, an improvement has been observed in 66 percent of the companies which participated in the survey. During the economic slowdown, there had been a loss of major markets in Europe and the U.S. for the products of Indian SMEs. There has been some issues regarding the rising cost of raw material and lack of buyers for the products.
A proper communication should be there between the firms and the government. The study revealed that about 73 percent of the companies participated in the survey were unaware of the steps taken by the government for supporting the sector. Another important problem is high cost of financing that is reported by 59 percent of the participants. It was estimated that the cost of finance had been increased over the last one year and this is reported by 97 percent of the participants of the survey. However the survey revealed that many SMEs have been dependent on banks.
It was studied from the report that lowering the cost of financing, support from government, and faster processing of loan applications had been necessary at the time of economic slowdown.