Even after five months Micro Small and Medium Enterprises in Tamil Nadu are yet to recover from the wounds caused by the rains and floods in December 2015.
According to a survey that was done by a group of entrepreneurs, on an average, each MSME has suffered direct loss of Rs 11.8 lakh, in addition to intangible losses such as loss of credibility with customers, broken supply chain and employee attrition. But no help has come their way.
This analysis was done between April 5 and May 4 and about 500 MSME firms spread across 18 industrial clusters were surveyed using a structured questionnaire by Nurture Entrepreneurship Development Trust, in collaboration with Feedback Consulting and 40 students from SRM University.
No support
The survey also revealed that most MSMEs have received no worthwhile support from bankers, insurance companies or the Government to tide over the physical and intangible losses suffered by them. “During the floods several ministers and party people visited the MSMEs in the state but our situation still remains the same. I have borrowed working capital from friends and family as bank closed doors when I approached them,” said the proprietor of an MSME unit in Guindy.
MSMEs unanimously agreed that banks were least helpful to tide over the difficulty while private financiers stepped in to fill the gap. MSMEs who participated in this study said that only 50 per cent of them have received their insurance claims post the calamity. The rest have been asked for further papers and proofs.
“While doing this survey we found out that insurance penetration is low among MSMEs. Close to two thirds of the respondents did not have insurance against calamities,” said Anand Kannan, one of the members of Nurture Trust.
“More than one-third of the MSMEs either slashed salaries or laid off employees to recuperate from the losses,” said Badri Seshadri, another member of Nuture Trust. Majority of the respondents indicated that they had to shutdown certain divisions in their business to deal with the flood impact. Cutting down on production was also prevalent.
Interesting perspectives
Suggestions from MSMEs on what the government could have done threw up interesting perspectives: One was to urge the banks to provide ad hoc loans MSMEs and provide guarantee against defaults; providing tax shelters and other fiscal incentives over a longer period of time to recover from the losses. Free or subsidised power supply and speedy settlement of insurance claims were some of the other requests by MSMEs.
More than 14,000 MSME units in industrial estates across the state including Guindy, Ekkattuthangal, Ambattur, Padi, Thirumudivakkam, Thiruvallur, Kancheepuram and Cuddalore suffered losses due to the floods in December 2015.
Tamil Nadu has 11.5 lakh registered units and more than 4 lakh unregistered units.
