According to a recent report by the Gokhale Institute of Politics and Economics (GIPE), lack of access to loans and delayed payments affecting cash flow management, difficulty in hiring and retaining skilled labourers, compliance-related issues, and a disconnect between implementing agencies and the target segment are some of the key barriers in business expansion of urban nano enterprises. The latest report of The Asra Centre of Excellence in Nano Entrepreneurship at Centre for Excellence in Entrepreneurship & Development (CEED) highlighted that over 500 nano enterprises, including grocers, boutiques, catering and food stalls, bakeries, salons, pharmacies, auto repair shops, and retail outlets, despite being located in tier-1 cities like Pune encountered significant obstacles in expanding their business. Although not officially defined in India, nano enterprises are identified as a segment within micro business segment of Micro-Small-Medium Enterprises (MSMEs), with annual turnover ranging from Rs 10 lakh to Rs One crore. According to NSSO 73rd round, nano enterprises form more than 60 per cent of micro-enterprises. As far as Udyam registration is concerned, of total MSME sector employment, 76 per cent is in micro businesses. Within micro-enterprises, 89 per cent is generated by nano businesses with a turnover of less than Rs one crore.
The survey results said that a majority of business owners started by borrowing from friends and family as a primary source of finance. Self-funding, including informal finance, was prevalent in all business segments regardless of gender, education, or age. The report details the need for effective utilization of existing government programmes. It discussed one-year fellowships for skilled youth to train and mentor nano business owners in specific technical skills and strategies. These findings underscore the importance of addressing them to support their growth and success, read the official statement.
The report also highlights how nano enterprises could potentially transform the economy, serving as a viable alternative to mass-produced brands. It explains the need to relook into existing Government programmes, to eliminate implementation barriers and ensure effective utilisation of existing programmes. The report elaborates on the need of forming Business Affinity Groups (BAGs) to reduce the disconnect between nano entrepreneurs and the system. Further, it highlights the lack of data on nano enterprises hampering the understanding of this sector and the formulation of effective policies to support their growth.