The micro, small and medium enterprises (MSMEs) sector in the country will be increasingly looking at non-traditional sources for financing needs, a business outlook survey conducted by the Confederation of Indian Industry (CII) revealed.A CII release said that, 10 per cent of the respondents are preferring capital markets, 12 per cent used credit guarantee schemes while 8 per cent are turning to venture capital as an alternate source of finance.As much as 52 per cent respondents saw the credit guarantee fund launched by SIDBI for guaranteeing loans up to Rs 50 lakh as a substitute for collateral security.The survey also found that high interest rates, collateral requirements of banks and financial institutions as well as bank paperwork/combined with bureaucracy remained key financial obstacles.Significantly, 34 per cent of the MSMEs said in the survey that they are likely to overtake large companies by 2020. Another 49 per cent felt that by 2015 they will graduate in to medium industries.Also, 81 per cent of the MSMEs, who took part in the survey supported the formulation of a procurement preference policy for the MSMEs for procurement by government and government aided agencies.
