MSMEs investment opportunities

Investors will have good opportunities to invest in Indian Micro, Small and Medium Enterprises (MSMEs) following the demonetization process which has left many of these businesses cash-strapped.

There will be a lot more candidates seeking fresh investment funds,” said Japnit Singh, deputy chief executive at the Singapore-headquartered #Spire Research and Consultancy.

There are a lot of very good msmes one of the side effects of demonetization will be that they will be strapped for cash, a lot of their businesses has been in cash, he said.

Indian banks are also in a good position to lend businesses at lower interest rates from bloated deposits, the results of November 8, 2016, demonetization.

The replacement of Rs.1.000 and Rs.500 note under the #Prime Minister Narendra Modi’s demonetization policy resulted in a sharp increase in deposits.

“The good news for businesses is that interest rates are being cut across the board” led by Reserve Bank of India, said Singh.

“We should see that trend continue and availability of funds from the banks is actually going to be a lot better. #Demonetization scheme has bloated deposits in banks,” he said after addressing a breakfast meeting for investors on Jan 20, 2017.

Singh expects banks to start lending loans to businesses.

Among the biggest issues for Indian businesses have been high-interest rate borrowings.

Singh also sees demonetization as a positive development as a part of basic foundation being built in India for the Foreign Direct Investment (FDI).

“There has been a lot of concern from FDIs about transparencies, corruption, (and) ambiguity in doing businesses. A lot of these concerns are going to be addressed now,” said Singh.

Undeniable, there will be short-term pains following the demonetization. But the degree of transparency and ease of doing business is really going to be good, he elaborated.

“India is relatively well positioned in cost of doing business,” he pointed out adding that the processes will be seeing an increase in the efficiency of doing business,” believes Singh.

“We should see a lot less wastage, a lot less leakage of funds for the foreign investors, (and) that would really have a positive impact on confidence.”

With demonetization the big area that have been addressed is the degree of risk, which will be lower in the real estate, manufacturing and ICT sectors among others. fii-news.com