Kuldip Maity

The world has arrived at a stage where people are gathering up their tools and gearing up to move forward in their lives after a prolonged period of interruption that drove many to listlessness. However, while the pandemic, in all its severity, might have merely been a concerning halt for some, one that they had the resources to ride over, for others, it was no less than a crippling standstill.

In the face of such an attack on their operations, the resilience of entrepreneurs kept them from giving up. However, it is undeniable that even after surviving such a long-drawn battle, MSMEs are yet to overcome a critical hurdle that stands before them - the struggle for resources. A watertight plan of action is essential to ensure not only the health of MSMEs but also the wellness of society on multiple factors that are largely dependent on the MSMEs such as poverty alleviation, employment, and the recovery of the informal sector economy as a whole.

MFIs play a crucial role in the recovery of MSMEs in the post-Covid-19 era. This is owing to a wide range of reasons, including by not limited to the uninterrupted support of financial resources through these times of setbacks. A lesser-known benefit that MFIs will bring to their MSME family is access to relevant knowledge. MFIs are significantly well placed when it comes to knowing the specifics of functioning in their operational areas. This knowledge includes expertise in identifying the major problems faced in such locations and thereby knowing strategies to optimally overcome those challenges. MSMEs that are associated with us, stand testament to the fact that in addition to financial support, VFS Capital is focused on ensuring that we create a safe space to openly exchange ideas and empower entrepreneurs with the arms to fight the problems that they face in their journey. As opposed to rigid financial infrastructure, MSMEs can avail the advantage of flexibility and cooperation since our ethos is driven by the overall socio-economic upliftment.

To make a mark during these times, MSMEs need to be focused on improving their workflow management to reduce redundant costs and adopt efficient processes. They should open their horizons to the inclusion of new technology, better planning, and innovative solutions.

It is our mission to inculcate a sense of faith in rural entrepreneurs to contribute in their unique way to the global supply chain. While it may seem overwhelming, entrepreneurs need to break down the process into parts and identify the important role that they may play in a large series of processes. If MSMEs are focused on making such conscious efforts backed by self-esteem, innovation, and the will to grow and adapt, they have the calibre to exceed all limitations and achieve monumental goals.

Gone are the days when environmental and social consciousness were alienable factors in the field of business. The global situation today has concretized a symbiotic relationship between business development and socio-environmental sustainability. In addition to the apparent moral and ethical factors that have driven this growth, there is a lesser-known reality when it comes to social and environmental consciousness in businesses. There is a direct correlation between the environmentally sustainable and socially inclusive approaches of business and its economic growth. SMEs play a major role in this context.

SMEs make a major contribution to the GDP as well as employment of the nation, especially when informal businesses are taken into account. Entrepreneurs behind these SMEs are known to identify opportunities that are overlooked by several major enterprises and thereby bring innovative solutions to society. It is undeniable that SMEs are key drivers of job creation at a micro level, thereby promoting social inclusion and uplifting through providing employment and skill development in the deepest strata of society.

However, when it comes to environmental sustainability, due to a variety of factors ranging from lack of awareness to feasibility, such small and micro enterprises are known to face several challenges. However, like it has been said, every challenge brings with it a new opportunity. Even in this case, due to their control over local markets, small and micro enterprises have the opportunity to capitalize on their stronghold by easily adopting sustainable solutions in their everyday operations. In simple words, SMEs can adopt green business approaches and sync them to their economic success.

A prime example of such a nexus of profit maximization and environmental sustainability is resource optimization. Businesses can optimize their resource consumption by experimenting and identifying the most resource-efficient way to carry out their business. This serves two purposes. Firstly, there is a positive impact on the environment due to reduced wastage. Secondly, businesses can reduce costs significantly by ensuring that they are consuming and utilizing each resource to its utmost capacity, which ultimately increases their profit margins.

Another horizon of opportunity lies for SMEs who adopt green business and sustainability as their main USP. Some examples that come to mind are businesses that are engaged in selling organic home-grown products, repairing and refurbishing used products before reselling them, upcycling products, as well as carrying out recycling endeavors at local levels. Due to their size and the market that they function in, SMEs have the benefit of having a customer base where there is a demand for a lot of these products, such as refurbished or repaired products which come at a reduced rate. Moreover, they can collaborate with several large enterprises that look to outsource their sustainable activities.

With the right kind of guidance and support, entrepreneurs can unleash their innovation and explore a world of opportunities. Needless to say, VFS Capital is always ready to be a reliable support system for entrepreneurs who have the zeal to undertake such endeavors and contribute to the socio-environmental future of society in their special way.

The winds of change are sweeping through the microfinance industry’s technology landscape and they are loving it. Fintech aims at integration, visibility, and accessibility, which are the goals of pioneer microfinance institutions. Fintech enables MFIs to enrich their functioning. However, the effects are multi-layered and not always a quick solution.

MFIs are mandated to provide their range of financial services to poor but enterprising women. Most of VFS Capital’s clients live in rural India and have seen financial struggles up close. However, many families who are most in need of our assistance cannot access it because of logistical hurdles. The adoption of technology in microfinance gives these families a chance to clear these hurdles. Committed MFIs, using technological strategies and devices, can reach and serve communities that were so far inaccessible.

MFIs must commit a big chunk of their resources to the process of verifying a client’s identity and needs. By using fintech, the verification process can be digitized and digitalized, making it considerably time- and cost-effective. Multiple levels of the microfinance industry can be transformed for the better with the use of technology in payments and management. The time and cost that are saved can be spent on upgrading the abilities of MFIs to uplift society.

MFIs have improved their visibility and transparency by taking to automation and digitalization. Technology simplifies and standardizes procedures that start from the time a prospective customer enquires about a loan, to the application, approval, collection, and follow-up. Consequently, real-time record-keeping and tracking minimize the chances of human error.

The use of technology also solves a pervasive problem: discrimination. Streamlining procedures using fintech is a step towards diversity and inclusion as it reduces the chances of bias.

However, with such benefits come several responsibilities. The MFIs have to train those responsible for handling the processes. The MFIs have to ensure data privacy, given that data is money. MFIs have to bear the burden of ensuring that these requirements are met.

It may take some time to adopt fintech in management and decision-making, and use artificial intelligence and other progressive technologies, but MFIs are already maximizing the potential of using fintech in rationalizing routine procedures and due processes.

Out of the several determinations to be made before starting a business, one crucial decision is the location. The place wherein a business is located is essentially the heart of its operations. The location must be chosen with care, considering that it is the connecting organ for several business processes.

For instance, especially for small and medium enterprises, the employees are often a tight-knit group of people from the same locality. Further, a range of factors such as the transportation of the team for the daily operations, logistics of raw materials and finished products, and accessibility for consumers also make it important to select a well-connected place of business. However, an undeniably decisive factor that determines the choice of the location is the financial ability to support it.

The costs involved in renting, leasing, or buying a property for carrying out business, as well as the recurring costs of maintenance and operations, are known to limit the possibilities for many entrepreneurs. So it is an extremely common practice in India for SMEs to operate out of their owners’ homes.

Since the scale of the business is limited in the beginning, the space provided by one’s home is often enough. The employees also find it easy to reach their workplace so they can work longer since there is no commuting time. The locality is familiar for the entrepreneur and often comes with established contacts, reliable sources, and pre-existing goodwill that attracts consumers.

The fact that the entrepreneur does not need to allocate a considerable amount of funds for renting or leasing out a new location, is normally the prime influencing factor behind choosing to work out of one’s own home. It is in this context that the world of SMEs and the subject of affordable housing are intricately interlinked.

With a majority of the MSME sector being located in rural areas, the accessibility to housing cannot be taken for granted. Opting for separate spaces to operate a business is a distant dream for most and a privilege reserved for a small minority. In such a scenario, making affordable housing available solves two problems in one stroke.

Families are provided with the assurance and comfort of having a secured space to stay. Additionally, with the help of the same space, people with an entrepreneurial mindset can operate their businesses with no incremental cost of real estate. Not only can the affordable housing facilities provide a location for business operations, but the proceeds and profit from the business can in turn be used to repay the loan secured for affordable housing. Thus, the story of the mutual benefit derived comes a full circle.

In my opinion, improving access to affordable housing across various strata of society and creating awareness regarding existing mechanisms can boost the SME sector in India.

There is an unsaid commonality between all kinds of plans and strategies. It is the component that often causes many people to not start with their ventures in the first place. It is also what causes many others to give up on their plans at the first sight of the monster lifting its ominous head. This component is known to haunt even the sturdiest lot of people, sometimes even depriving them of a peaceful night's sleep.

Some, possibly due to their own set of encounters, might have already guessed what it is. This lingering reality is none other than the fear of unpredictable risks, the one that sneaks up despite carefully designed strategies; the very thing that we did not foresee.

This shape-shifting menace, which we often label as the "risk factor", can visit one at the most opportune time, just when things have started picking up. On other occasions, it can also prop itself up to pile on to an already dire struggle.

Such was the situation of our Manika Adhikary.

A mother of two, she had availed herself of our resources to buy a cycle rickshaw van for her business. After rising to meet an already long and tiring battle with the pandemic, as life would have it, her van was stolen one fateful day. Thus, she was deprived of the fruit of her labor. But she repaid the loan that she had taken against it.

It is in these situations when the resolute are tested at the brink of their capacities that their undying spirit reveals itself. Instead of succumbing to the misfortune, Manika responded with renewed willpower. One might infer that her experience with the world had toughened her enough to know better than to give in to the clutches of misfortune. Instead of blaming fate, she resolved to move forward with steadfast determination.

Making the best of what she still possessed, that is, the invaluable blend of hope and skill, she started a new business. With the support of her family, she started a sewing business. Not only is she supporting her livelihood but is also set on availing yet another loan to buy a new van that shall put her back in the game.

Manika's story is a reflection of the fierce women who are empowered with a treasure that they refuse to let anyone steal: hope.

It is in front of these powerful warriors with unfazed grit that the monster of unpredictability bows down. They face the unfortunate circumstances that life throws at them, head-on.

The testimonial of Manika's fight for success is an inspiration for the numerous strugglers who despite all odds, dare to hope. For these warriors who help themselves in the toughest of times, VFS Capital shall do everything in its power to proudly stand as a pillar of support, by believing in them yet again.