Indian SMBs Share A Greater Positive Outlook than the World

As India begins its new fiscal year (FY22), a C2FO global survey of over 6,700 leaders of small and mid-sized businesses (SMBs) found remarkable agreement in terms of access to liquidity, funding costs, and future outlooks.

The aim of the 2021 Working Capital Survey was to assess the financial health and prospects of small businesses in countries around the world. The global economy is forecast to increase 5.5% in 2021 and 4.2% in 2022, according to the International Monetary Fund (IMF).

India is expected to be the world’s fastest-growing economy in the next two financial years, with growth of 11.5% in 2021 and 6.8% in 2022, according to the IMF.

Despite the difficulties faced in 2020, respondents’ overall optimism about their potential market prospects was relatively high, averaging 6.5 on a scale of 1-10. The market prospects received a rating of 7.5 from Indian respondents. Following the market crisis triggered by COVID-19, India’s Union budget focus strongly on digitalisation and economic development. Furthermore, India’s Rs. 20 lakh crore (US$ 272.41 billion) stimulus program, announced in May 2020, ranked top in the world after the financial packages announced by the US (13% of GDP) and Japan ( > 21% of its GDP).

In India, about half of the respondents requested government assistance, with the majority receiving support. The severity of the pandemic’s effects, as well as the position of governments in helping their economies, can be seen in these percentages.

Across 16 countries, an average of 87% of respondents said they have adequate cash for the next six months. Around 92% of respondents in India said they had all of the liquidity (i.e., cash flow) they needed to run their company for the next six months.

As per the survey, SMBs’ immediate survival has been and will continue to be dependent on government-backed loans. Alternative financing sources and working capital strategies, such as early payment on accepted invoices, would be crucial to a company’s success. SMBs’ hope for the future usually increases as their emphasis changes from survival to recovery. The momentum should continue, just as it has in prior economic cycles, considering that the rising demand for liquidity could be met with affordable working capital.

C2FO is the world’s biggest working capital platform. It represent over one million companies with annual revenue of US$ 10.5 trillion in > 180 countries. The online portal links over US$ 125 billion in daily accounts payable and receivable transactions. The company also offers AR financing and other data-driven funding solutions.

C2FO is a form of working capital that benefits all. The goal is to create a future in which every business in the world has access to the capital it needs to expand.