India—Small and Medium-Sized Enterprise Financing and Development Program

India’s small and medium-sized enterprises (SMEs) stand behind the country’s economic growth and employment generation and make a significant contribution to poverty alleviation. The sector, however, suffers from limited access to finance and business development services, with the state-run system of business services covering only about 1 percent of all SMEs. In line with the Indian government’s strategy to strengthen economic growth and employment by developing the SME sector, DAI facilitated linkages between SMEs and business development and finance service providers.

Sample Activities

• Pilot initiatives that showcase market-oriented, cost-effective business development services for SMEs in the pharmaceutical, automotive component, and garment sectors in New Delhi, Hyderabad, and Indore, and in the small mountainous state of Uttarakhand.
• Provide export market facilitation services for SMEs in the Ayurvedic (traditional Indian medicinal system) and natural pharmaceutical sectors.
• Coach local service-delivery technical partner on how to profitably serve the SME market.
• Encourage partner banks to serve the under-banked sector of the Indian economy and help them do so more cost-effectively and profitably.
• Work with State Bank of India (SBI) and ICICI Bank (India’s largest private bank) to improve their SME credit risk assessment, and thereby streamline their processes for evaluating SME loan applications, saving the banks money, and saving SME clients valuable time.

Select Results

• Introduced the concept of SME vendor development programs at Tier I automotive sector firms. Such programs are widespread in original equipment manufacturers but had not been introduced farther down the value chain to SMEs.
• Introduced customer relationship management (CRM) to ICICI Bank and SBI through development of a foundation course in CRM. SBI offered this CRM course to its own staff and marketed the course to other banks, including the Small Industries Development Bank of India.