Practically 70% of two-wheeler sellers but to register as MSMEs; many unaware of govt credit score schemes: Survey

67 per cent of two-wheeler vendor respondents weren’t registered as MSMEs.

Ease of Doing Enterprise for MSMEs: At the same time as the federal government had recognised auto dealerships as micro, small and medium enterprises (MSMEs) within the Union Finances 2021-22, a lot of two-wheeler sellers are but to register themselves as MSMEs, based on a survey by credit standing company Crisil. 67 per cent of two-wheeler vendor respondents weren’t registered as MSMEs compared to 63 per cent and 72 per cent of passenger automobile sellers and business automobile sellers respectively who have been registered as MSMEs.

Furthermore, a lot of the sellers weren’t even conscious of the completely different credit score schemes accessible for MSMEs and had solely availed moratorium extension to date. Not simply 76 per cent of two-wheeler sellers however 54 per cent of passenger automobile sellers additionally didn’t find out about schemes that might allow them to entry further credit score amenities. The survey famous, “The federal government’s tweaks in regulation permitted auto dealerships to register as MSMEs, which might assist them get easy accessibility to extra credit score avenues and varied schemes; nevertheless, their consciousness concerning the schemes is low.”

“Regularly, we interact with sellers on how the MSME registration is finished however in the end the registration needs to be finished by themselves solely. There are plenty of sellers who’re new into the section, many preserve getting into and exiting the dealership market additionally and at occasions it turns into tough to trace them however we preserve updating them on the method to be adopted for MSME registration and schemes round MSMEs. There are round 30,000 dealerships (throughout India within the auto retail trade) and it would take a while for a lot of of them to register as MSMEs,” Saharsh Damani, CEO, Federation of Vehicle Sellers Associations (FADA) advised Monetary Specific On-line. FADA is the apex physique of the car retail trade in India engaged within the sale, service, and spares of two and three-wheelers, passenger automobiles, utility automobiles, and business automobiles. 

“The federal government has introduced a slew of measures similar to credit score assure schemes, collateral-free loans, and curiosity subventions for the good thing about MSMEs. Though auto dealerships have began registering themselves underneath MSME, nevertheless, most have solely availed mortgage moratorium until now and should not conscious of different schemes relevant for MSMEs. Creating consciousness of the schemes amongst the auto dealerships will allow them to entry such credit score amenities and safe them throughout such unprecedented occasions,” Bhushan Parekh, Director, Crisil SME Options advised Monetary Specific On-line.

Whereas the lack of expertise and decrease registration depend is a problem, importantly, the gross sales restoration this fiscal yr is anticipated to be patchy at 10-15 per cent based on the two-wheelers, passenger automobiles, and business automobiles sellers, as per the survey of 123 sellers. Nonetheless, possibilities of a 3rd Covid wave, improve in gasoline costs, and provide constraints of authentic gear producers (OEMs) are more likely to be causes that might gradual the sector down.

The quantity share of MSME debtors within the auto and auto parts trade, which had near 1.29 lakh debtors as of June 2020, stood at 90.55 per cent as of June 2020. Amid Covid, this had elevated marginally from 89.51 per cent through the year-ago interval and 88.88 per cent as of June 2018, based on the info from SIDBI and credit score bureau CRIF’s report in January this yr.

This story was up to date with Crisil’s assertion later.

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https://www.financialexpress.com/trade/sme/msme-eodb-nearly-70-of-two-wheeler-dealers-yet-to-register-as-msmes-many-unaware-of-govt-credit-schemes-survey/2321051/