Just 15% access institutional finance

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: We are new to the business of exporting granite. At present, we sell our products within India. We process gangsaw slabs, tiles, cutter slabs and monuments for the US, German, the UK and Japanese markets and also deal with all south Indian rough granite blocks. We are interested in marketing our products directly to foreign countries. Kindly provide us some suggestions about how to get buyers and how to market our products.

— R Suman through email

Since you are new to exports, the first thing I would suggest is you visit the web site http://www.smenetwork.net/marketing/exportimport.htm and go through the material available there, particularly the ‘how to export/import’ section. Second, do take membership of the Chemical and Allied Export Promotion Council (CAPEXIL), if you are not yet its member. You can get the details from http://www.capexil.com. The products you manufacture are being exported to more than 80 countries from India. There is no point spreading your resources too thin. Spend some time and zero in on select markets. You may consider Europe, the US and Saudi Arabia to begin with. Your product category is such that it is difficult to convince buyers, unless you have met them in person and they have seen your product. Though you could get in touch with some buyers after much effort through correspondence and cold calling, the cost of sampling and courier will be immense. The best way out is to plan participation in select trade fairs, at least for the first time.

Capexil regularly organises participation in trade fairs and you may go along with them. You may also avail of market development assistance (MDA) grant through them. If Capexil is not organising collective participation in the markets of your choice in the near future, you may also consider participation in the upcoming fairs once you have selected the market. You may choose fairs from these sites: http://www.biztradeshows.com/stones, http://www.worldstonex.com/en/Events.asp

Needless to say, you should be thoroughly prepared with catalogues, samples sets and a web site before participation. If you have good manufacturing facilities/latest machines, do get a CD prepared. Getting ISO 9000 and a credit and performance rating from a good international agency will also help. If you are an SSI unit, you may get financial assistance to acquire these certifications.

I am an economist based in London, working on a project to evaluate the impact of priority sector lending on small enterprises in India, including those units that are not registered. What are the best sources of data on small sector that can throw light on: simple count of the number of small businesses spread state wise, businesses in various geographical areas, urban/rural, data on output and employment, sources of finance etc.? Has the policy of directed lending been instrumental in reducing poverty in India?

—D Donaldson through email

There are four sources of data that you may consider: national accounts statistics (CSO), economic census (CSO), national sample survey on India’s informal sector (NSSO) and all India census of SSI (DC-SSI). In my opinion, the last would suit your requirement the most. There have been three national census so far on SSIs: 1973-74 (reference year 1972); 1990-91(reference period 87-88) and 2002 (reference year 2001-02).

These are conducted by the development commissioner of SSIs. The census results provide information on a number of units, state/district-wise, investment, employment, production etc. Interestingly, approximately half of the units covered are rural enterprises.

The caveats, however, are: one, that SSI census excludes other important sectors— part of traditional industries such as khadi and village industries, handlooms, handicrafts, sericulture, coir sectors, as well as the powerloom sector. All of these sub-sectors are being regulated under different administrative set-ups.

Second, the SSI sector is composed of registered (with authorities) and unregistered units. The SSI Census covers registered units but data for unregistered units are derived through sample surveys. Both are subsequently clubbed to estimate the size of the entire SSI sector.

With regards to the impact of India’s ‘social banking’ on reduction of poverty, I think linking poverty reduction to social banking alone could be too ambitious. I fear neither gro-und realities bear out this fact nor the corroborative data. For example, even in the latest census of SSIs (2001-02), the number of units with access to any kind of institutional credit is below 15%.

More important, the number of unregistered small-scale units having any form of institutional/ bank credit is less than 4%! Almost the entire smaller segment of small sector relies on informal sources of finance rather than banks. The number is, no doubt, far less in the household non-farm sector in villages.