MSME: selecting the right advisor and its advantages

But finding such a thing in itself is a challenge and the way to overcome it is by hiring an independent MSME advisor who on behalf of the MSME can bargain and negotiate for better interest rates as well as terms and reasonable conditions that support the business cycle of MSMEs. Needs. Msme Advisor helps MSMEs to make the right financial decisions by giving them a good understanding of finance.

MSME Assist (MSME Advisors) can bring the necessary talent and their most important skills, i.e. financial acumen, to decipher the intricacies of MSME challenges. As the perspective of assisting MSMEs would be completely independent, devoid of any preconceived notions, always thinking how to solve long-term and short-term challenges.

This is the real story of Mrs. Selva Lakshmi, an entrepreneur. She is a graduate of an M.Phil and is computer literate and knowledgeable, running a xerox and stationery store in Madurai. His shop offers typing jobs for customers in addition to stationery items targeting school children.

Selva Lakshmi’s honesty is her USP that wins loyal customers and retains them. Her husband works in a small tea shop as a tea master for a meager salary. Despite this, she is a courageous and confident entrepreneur who believes that by keeping your head down and working smart, you can reach any heights.

MS Devi, Assistant Professor, SNU, Chennai is part of the MSME Assist Vertical Research and Study and leads collaborative initiatives between industry and educational institutions in the field of research and study of MSME.

As she does not have solid financial support, she nevertheless took this risk. But his sharp mind and burning desire to succeed against the odds doesn’t stop his enthusiasm from trying new things in his business.

Her entrepreneurial journey started with a few hiccups and after a few falls and tries, she was able to find her place and was able to comfortably manage the family expenses thanks to the income from the shop.

But during his journey, a strange thought crept into his heart and this thought was going around in his head. The rent she was paying for her rented house, it pinched her and made her uncomfortable and it gave her unnecessary worries.

As she confided in her mother, she talked about her unfulfilled dreams of owning a home. Selva lakshmi also understood that this could be solved by owning her own house.

Business was better, it gave her confidence, and she also wanted to buy a house as soon as possible. She was convinced that she could repay the loan with the income she earned from her business.

Ms. Lakshmi easily secured a home loan. But here’s the problem with not thinking through all of the business and personal perspectives or having an MSME helper at your disposal.

She got the home loan at an exorbitant interest rate. She didn’t know the consequences of huge debt and interest as a fixed cost during times of low demand or no demand. Everything went well at first after taking out the loan.

She was able to manage the interest rate without any problems for a year.

Then came the most difficult period, as the Covid 19 pandemic fell unexpectedly. It brought the darkest working days of everyone’s life. As with Covid, businesses have been told to close due to the lockdown and the necessary steps governments around the world have asked to be taken.

As the store was closed, revenue ceased from the business, but outgoing and fixed expenses continued to accumulate. As covid has stopped everything in everyone’s life except the huge interest on the home loan for selva lakshmi.

She had to sell her two-wheeler to pay off the loan for a few months, then she had to take extra part-time work to pay off the loan for a few months, closing the shop in the evening (the rush hour of his business) for his part-time job. This part time affected her the most because she could not earn money during the peak hours of her business.

She was struggling to pay off the housing installments, that was what her mind and body were focused on and that was the main thing that stuck in her mind. She was unable to build up working capital for her business and open the shop in the evening.

The high cost of the loan was eating away at his funds and hampering the sustainability of his business.

If she ever had the opportunity to get the right advice on how to avoid high interest loans, she should have taken her business to the next level!

Are we getting the loans at a reasonable cost? is a question for entrepreneurs to ask.

MS Devi, Assistant Professor, SNU, Chennai is part of the MSME Assist Vertical Research and Study and leads collaborative initiatives between industry and educational institutions in the field of research and study of MSME.

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