Challenges and opportunities for Indian SMEs in 2018

Source: Pixabay

More than 50 million SMEs exist currently and over the last five decades, the SME sector has grown dynamically by contributing 40% of the country’s exports and creating millions of jobs annually.

The SME sector has a lot of potential for growth in the coming years with respect to job creation, entrepreneurial spirit, and innovation.

However, the sector has always struggled due to the burden of challenges. Unfortunately, the trend for the challenges in the coming year also does seem to decrease.

Following are the challenges for the SMEs in 2018:

1) Inadequate access and marketing platform

SMEs in India have been subjected to weak marketing linkages. Due to factors like insufficient government support, lack of adequate marketing facilities, the path for the marketing and sale of SME products will continue to be a challenging one in future.

For marketing of products or services internationally, SMEs are always constrained by the scarcity of budget, which in turn has limited their growth.

2) Lack of access to new technology

Although technology has advanced in the recent years, thanks to the proliferation of mobile phones and internet, the continuance of low technology use by SMEs has always resulted in low productivity. This has rendered them uncompetitive in the ever-widening market.

Though SMEs in metropolitan cities have now shown their positive attitude towards the technological uptake, the rural destinations are still not advanced. This will continue to be the challenge in 2018 also.

3) Lack of required credit

The most significant constraint to the growth of SMEs in our country relates to inadequate capital and credit facilities. In the coming year also, SMEs are bound to face the situations of complex collaterals by the banks, cumbersome sanction procedures, delay in disbursement and high rate of interest on the SME loan. Difficulty in obtaining an easy and timely credit is crucial factor hampering the SME growth.

4) Cumbersome regulatory practices  

The regulatory practices such as construction permits, resolving insolvency, collateral securities/guarantees, and taxation etc. will continue to be the constraining factors for many SMEs in 2018.

The absence of a common regulatory body and inadequate provisions for start-ups will affect the growth of such enterprises.


From government policies to technological advancement, SMEs can look forward to the following trends in 2018:

1) Leveraging the e-commerce trend

SMEs now can make their presence in the online world by going digital. For many years, the SME sector was struggling with the intense competition, but going digital can give them the required edge.

2) Adoption of technology

Since social media, mobile phones, and cloud technology is the talk of the town now, SMEs can take help of these platforms. Embedding the social and cloud platform will open up vast opportunities for revenue growth and operational efficiency.

3) Taking advantage of Government schemes

SMEs need to receive benefits of Government initiatives such as ‘Make in India’, ‘Startup India’ and ‘Skill India’. These schemes introduced by the government are aimed to promote an entrepreneurial culture to grow the current SME status.

4) Abundance of Fintech firms

With the number of Fintech firms and lenders on the rise, SMEs will have the opportunity to get accessible and affordable financing options.

SMEs always had to worry about the gap in their cashflows while taking the SME loan from the traditional lender. But now, they will be able to focus on their business entirely, as enhanced speed, transparency, and quick SME loan facilities are about to increase significantly.

SME loans have always helped the enterprises to meet all their business needs that arise from time to time without facing any difficulty.

Following are the business needs catered by the SME loan:

  • Launch of a new product range
  • Business expansion
  • Paying out salary to employees
  • Warehousing needs
  • Purchasing new equipment
  • Credit for marketing and advertising activities

Getting easy access to loans is not the only decisive factor, many lenders now do not require the borrowers to put their personal or business assets on the line to qualify for financing.

Funding now has become faster as there is no need to pledge collateral, less paperwork, and minimal documentation.

The online route of SME loans has further cleared the fog by giving the convenience of accessing the business loan details anytime, from anywhere online.


2018 is going to be a year of progressive changes in the Indian SME sector based on the trends mentioned above. With a significant rise in technology and innovation, a business-friendly atmosphere for the SMEs will become a reality.

Featured Image Credits: