What is National Agriculture Infra Financing Facility? - By Egniol

National Agriculture Infra Financing Facility

What Is National Agriculture Infra Financing Facility Scheme (NAIF)?

A well-developed infrastructure scheme like National Agriculture Infra Financing Facility Scheme is essential for agriculture to progress and for increasing the output dynamics. Until infrastructure, particularly in the post-harvest phase, is developed, the fruits of farmers’ labour will not be used to their full potential, and they will not receive a just price for their efforts. The growth of such infrastructure needs to account for natural hazards, geographical differences, human resource development, and the maximisation of our finite land’s potential.

For this reason, the Department of Agriculture and Food and Workforce Development (DA&FW) developed the Central Sector Scheme to attract a medium-to-long-term debt financing facility to fund investments in economically sound projects involving postharvest management infrastructure and farming assets for communities.

Subsequently, it was announced in the 01.02.2021 budget that APMCs would also be eligible to receive benefits from the scheme. With the Cabinet agreement, the scheme was revised to be more welcoming of many perspectives.

Objectives of National Agriculture Infra Financing Facility Scheme (NAIF)

What is National Agriculture Infra Financing Facility? - By Egniol

Multiple objectives of national agriculture infra financing facility can be accomplished with the help of this finance facility for the various players in the agricultural ecosystem.

A. Farmers (including FPOs, PACS, Marketing Cooperative Societies, and Multipurpose cooperative societies)
  • A better marketing system would facilitate farmers’ increased value realization on by enabling them to sell directly to a wider audience of consumers. The result will be a rise in farmers’ average income.
  • Farmers will have fewer post-harvest losses and fewer need for intermediaries if they invest in logistical infrastructure. This will increase farmers’ autonomy and enhance their market access.
  • Farmers will be better able to maximise profits by timing market sales with access to modern packaging and cold storage systems.
  • Farmers may save a lot of money by pooling their resources and using them to boost output and maximise the efficiency of their inputs.
B. Government
  • Through interest subvention, incentive, and credit guarantees, the government can steer priority sector lending toward economically feasible projects. Because of this, a virtuous cycle of agricultural innovation and private-sector investment will begin.
  • Government efforts to lower national food waste percentages as a result of post-harvest infrastructure upgrades will position the agricultural industry to compete with global norms.
  • Central/State Government Agencies and local governments will be able to design successful PPP projects to attract investment in agricultural infrastructure.
C. Agri entrepreneurs and start-ups
  • If investors are willing to put money specifically toward the agricultural sector, innovative new technologies like the Internet of Things and artificial intelligence will be implemented.
  • Connecting the ecosystem’s participants will increase opportunities for business owners to work with farmers.
D. Banking ecosystem
  • With Credit Guarantees, incentives, and interest subvention, lending institutions will be able to extend credit with a lower level of risk. This plan will aid in expanding their consumer base and diversifying their business.
  • The refinancing facility will enable cooperative banks and RRBs to play a larger role.
E. Consumers
  • With fewer inefficiencies in the post-harvest ecosystem, the primary advantage for consumers will be a greater proportion of products reaching the market and, consequently, improved quality and prices. Overall, all eco-system participants will profit from the funding facility’s investment in agricultural infrastructure.

Who Can Apply?

What is National Agriculture Infra Financing Facility? - By Egniol
  • Agricultural Produce Market Committee
  • Agri-Entrepreneur
  • Central sponsored Public-Private Partnership Project
  • Farmer
  • Farmer Producers Organization
  • Federation of Farmer Producer Organisations
  • Joint Liability Groups
  • Local Body sponsored Public-Private Partnership Project
  • Marketing Cooperative Society
  • Multipurpose Cooperative Society
  • National Federations of Cooperatives
  • Primary Agricultural Credit Society
  • Self-Help Group
  • Federations of Self-Help Groups
  • Start-Up
  • State Agencies
  • State Federations of Cooperatives
  • State-sponsored Public-Private Partnership Project.

Loans up to Rs. 2 crores would be eligible for credit guarantee coverage from this financing facility under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme. The government will fund the cost of this insurance. The DA&FW FPO promotion scheme includes a credit guarantee facility that can be used by FPOs.

Interest on loans taken out under this financing facility would be subsidized at a rate of 3% per year, up to a maximum of 2 crores. Subsidy funding will be provided for a maximum of 7 years. Whenever a debt exceeds 2 crores, the amount of interest that can be subsided is capped at 2 crores. The National Monitoring Committee has the authority to establish maximum levels and fixed percentages of financing for private entrepreneurs from the total financing facility.

The Scheme’s implementation period extends from the 2020-21 fiscal year to the 2032-33 fiscal year. The program’s loan disbursement period is set to conclude in six years.

EGNIOL‘s objective is to create India’s largest MSME and start-up ecosystem. In order to accomplish this, Egniol offers comprehensive solutions for the broadest spectrum of government benefits, management consulting, training, and mentorship for MSMEs & start-ups. Our mission is to be the go-to partner for all of a start-up’s needs, providing them with the proper advice for future growth. Contact us now for more information on this scheme or for consultation!

Everything One Needs To Know About MSME Loans

MSME Loans: All You Need To Know Read the Complete Guide

What is MSME?

MSME marked its pillars in October 1999. Further, in September 2001, it got into 2 different divisions, namely, the Ministry of Small Scale Industry and the Ministry of Agro and Rural Industry. Further on, because of changes in the Government of India’s rules, 1961 on 9th of May, 2007 it was consolidated into Micro, Small and Medium Enterprises.

Objective of MSME loans:

The goal for which MSME was born was to develop small and medium sized businesses along with Khadi, Village and Coir to establish new businesses and generate more bread and butter for people dedicating their time and efforts by working for them. For being a supporting pillar and helping the MSMEs intensify their presence Ministry now sets policy for its governance and facilitates programs, projects, schemes and further to help them more, they even supervise their execution. 

A brief about MSME loans:

brief about MSME loans

So as soon as the MSME was developed we need someone to govern it, right? So, the governance for it was handed over to the Ministry of Micro, Small and Medium enterprises and since then it generates good employment and revenue for our economy.

 The Government of India provides loans to Micro, Small and Medium Enterprises to boost their growth up. India is the core of MSME and through it us getting benefits so we can see that this segment caters a large number of Audience. Getting the MSME loans offers strength and potential to business which has the plan to expand their networks and wish to serve the best through their products or services.

What role does RBI play for the upliftment of MSMEs?

RBI has made significant efforts to support MSME growth and has planned and mapped every step that will make it simple and beneficial for MSME and the general public to access services and benefit from them. The Government of India and RBI both work as a backbone for this by providing various programs, schemes, helps, etc. to the MSME.

Classification of MSME:

Manufacturing companies that produce or manufacture products for any industry, or that employee equipment and plant to add value to a finished good that has a unique name, personality, or use; and Service Businesses that perform or provide services;

MSMEs are now characterized on the basis of Composite Criteria of “Investment in Plant & Machinery / equipment and Annual Turnover” as per the updated Classification effective July 1, 2020.

What are the eligibility criteria for MSME loans?

What are the eligibility criteria for MSME loans

Various banks NBFCs, Private-Run Banks, State-Run Banks readily provide loans to MSMEs, Moreover NBFCs and State-run banks provide loans much quicker to MSMEs.

  • Any business entity, be it a small start-up, female entrepreneur, self-employed professional, proprietorship and partnership firm can avail an MSME Loan.
  • The task here is to determine what should be the amount of loan; so, it depends from person to person, business to business but the loan amount ranges from Rs.1 lakh to Rs. 50 crores.
  • There are some banks that, without any security, provide tiny collateral of Rs.10-20 lakhs up to huge amounts of Rs.40-50 lakhs, so the collateral amount range changes.
  • There is plenty of documentation required for unsecured MSME loans.
  • Certain MSME loans are being provided for various big or small reasons for the entity.

RBI and its characteristics:

The following are the framework’s key characteristics:

  • Banks or creditors should create three sub-categories under the Special Mention Account (SMA) category as per the Framework to identify account stress before an MSME loan account becomes a Non-Performing Asset (NPA).
  • Every MSME borrower has the option to voluntarily start a legal action under this Framework.
  • A committee-based method for choosing the corrective action plan will be used.
  • Deadlines have been set for making several decisions following the Frame-work.

So here as we all can see how important, integral and major role a Micro, Small and Medium Enterprise plays in developing our country, providing bread and butter to the economy and majorly helping the rural part of the country with employment and help. The government of India is working very well for better functioning, growth and ease of this sector. We, at Egniol, provide the best and most well-followed consultation and assistance throughout the process of MSME loans, your experience will be hassle-free and you will not have to double-check your work with us.

Sustaining Business Growth_ Essential Strategies For Start-ups

Sustaining Business Growth: Essential Strategies For Start-ups

Owning a start-ups is difficult in and of itself. It’s one thing to have the resources and expertise to launch a company; it’s quite another to stay afloat in the face of cutthroat competition, a precarious economy, and a fluid, ever-evolving marketplace. Some action is required, even if it’s just a single baby step, and the company’s needs must be satisfied one by one.

Some rules are more important for survival than others. In order to succeed, you need to adhere to a certain set of actions and methods, as most successful business owners and managers will tell you.

If they want to be a success story and expand their businesses, start-ups must follow these non-negotiable parameters.

Making use of low-cost or no-cost promotional methods

Making use of low-cost or no-cost promotional methods

Since you are just getting started on the road to financial success, it becomes sensitive to reconsider lavish strategies for attracting new customers. Don’t throw away your chance for a return on investment by paying more than you have to for that sponsorship or marketing. By integrating social media into your marketing strategy, you can reach more customers without blowing the budget.

Remain relevant

It will be challenging to bring your business back to the forefront if your service or product is no longer seen as essential or has been left off the list of current trends. Avoid waiting for disaster to strike. Stay abreast of what customers need and want, and pay attention to what they’re saying about your product or service. Be sure to start over if you need to. Get the ball rolling on growth. Whether you’re building on top of an existing service or starting from scratch, you should always be offering something new. Whatever the case may be, focus on how pertinent you should be.

Respect your customers and never skimp on service

It will take a lot of work to earn the trust of your customers, but a single misstep is all it takes to lose them forever. No matter how you innovate, grow, or expand, you can’t afford to let client satisfaction slide. Your team members should be able to perform effectively. Make sure they have extensive training so they can provide your consumers with the assistance they need while dealing with you.

Adopt the right kinds of technology

Adopt the right kinds of technology

Today’s start-ups are keenly interested in ideas and technology that can streamline a wide range of back-office tasks and sustaining business. Find out when and how to use technological advancements like automated financial management tools and phone systems.

Never be afraid to put yourself out there

Keep trying to add something new to the discussion. There will be plenty of new businesses that take the easy route, but if you approach things a little differently, you may find a promising new market.

Don't be afraid to make mistakes

As the saying goes, “failure is the pavement to success.” It’s quite unlikely that you’ll achieve success without first experiencing failure. Your failed project can teach you just as much as your successful one, but the most valuable lesson it can teach you is how to pick yourself back up and try again.

Do the right thing and hire the right people

Job opportunities will increase dramatically as a result of this growth. Don’t dismiss something as unimportant. To avoid stunting your company’s growth, it’s crucial to hire both the people you need today and the people you’ll need tomorrow. Use as much time and energy as necessary to find the right person for each job.

Never stop doing what has proven successful

It’s not broken, so don’t fix it. Fulfilling a need leads to growth. Growth indicates that your start-up is filling a need and finding favour with consumers. If you decide to make a change in your strategy now, you may be jeopardising your success.

Quickly stop doing that which isn't productive

Once you know what is succeeding, you may begin to streamline it. Find the money being wasted in the company and put it into what is producing results or another initiative.

The start-up phase inevitably involves certain growing pains. A solid indication of a successful business. Some of the challenges you face could be opportunities in disguise. Starting a business is challenging and requires a lot of labor. Rapid expansion in the early years is great, but every business needs to keep pushing forward at some point.

As a start-up company, expansion can be slow in coming. Businesses that want to succeed on any significant level require their owners to put in long hours. Start-ups have the potential for growth, but only with dedicated effort. However, if you put in the time and effort, the payoff might be substantial.

Stand up India Scheme - Egniol 1

Stand Up India Scheme – Benefits, Features & Eligibility Criteria

Stand Up India Scheme

The government of India created the Stand Up India scheme to provide funding for women business owners and those from the Scheduled Castes and Scheduled Tribes. The primary motivation for this funding comes from the government’s desire to encourage business ownership among women and members of the SC/ST community. A greenfield business loan between 10 lakhs and 1 crore is approved for at least one Scheduled Caste and one Scheduled Tribe individual at each bank branch.

Entrepreneurs have the option of starting businesses in a wide variety of fields, such as production, agriculture, services, and commerce. If the business is owned by a corporation, at least 51% must be held by a member of a socially and economically disadvantaged group or by a woman. 

Stand Up India Scheme's Key Features

On April 5th, 2016, Indian Prime Minister Narendra Modi unveiled the Stand Up India Scheme. The goal of the programme is to provide low-interest loans to people of SC/ST origin and women across the country so that they can start their own businesses.

Features of the Stand-Up India Program include

  • The scheme was launched by the Indian government’s Ministry of Finance to boost the country’s start-up culture.
  • The range of the Stand-Up India loan is 10 lakhs to 1 crore. This loan amount also includes the essential working capital for launching a firm.
  • A single bank branch can sponsor at least two entrepreneurial endeavours. One project must belong to a member of the SC/ST caste, and the other to a woman entrepreneur.
  • To withdraw the credit amount, the government gives entrepreneurs with Rupay Cards.
  • The bank maintains a complete record of the loan’s utilisation to guarantee that the funds are solely utilised for business objectives and not for personal ones.
  • In addition to providing the loan, the government also provides pre-loan training in marketing, factoring, and loan facilitation.
  • The Stand-Up India portal is also designed to facilitate online registration for the programme and to offer additional support services.
  • Applicants for the Stand-Up India Loan are given information about online platforms, web entrepreneurship, e-marketing, registration, and factoring.

Eligibility for the Stand Up India Scheme

Eligibility for the Stand Up India Scheme - Egniol

Candidates who wish to apply for the Stand Up India Scheme subsidy must be aware of the eligibility requirements in order to avoid future complications. The primary eligibility requirements for the Stand Up India Scheme are as follows:

  • The applicant for a loan from Stand-Up India must be at least 18 years old.
  • The willing entrepreneur must be a member of a SC/ST tribe or a woman.
  • The company must be a private enterprise, partnership, or limited liability partnership.
  • The company’s annual revenue must not exceed 25 crores.
  • The financing must be used for greenfield initiatives, meaning the entrepreneur must be launching a brand-new venture in the service or manufacturing industry.
  • The business must deal with new and marketable consumer products.
  • The applicant must not have defaulted on any bank or NBFC obligations.
  • The bank-approved loan must be insured by the Credit Guarantee Fund Scheme or secured with collateral.

What is the objective of Stand Up India Scheme?

New industries are currently only a source of hope for already-established urban areas. If this program goes into effect, however, it will stimulate new industrial activity in the country, benefiting 2.5 lakh people and 1.25 locations annually.

Even though it was done in the name of the poor, nationalising banks meant that roughly 40% of the people still lacked access to banks throughout the first 70 years after independence.

The idea is to extend credit and funding to regular people as well as corporations.

Benefits of the Stand Up India Scheme

Benefits of the Stand Up India Program - Egniol

The citizens of India are the primary beneficiaries of the government’s Stand Up India Scheme, as is the case with every government programme. Several positive outcomes would result from implementing the Stand Up India Scheme.

  • The initiative’s primary objective is to support and inspire young entrepreneurs so as to reduce unemployment.
  • If you are an investor, Stand Up India Scheme provides the appropriate platform where you may obtain professional guidance, time, and legal understanding. A further advantage is that they would support you with the launch of your business for the first two years.
  • They also give consultants with post-installation assistance.
  • In addition, businesses do not have to worry as much about how they will repay the loan because they have seven years to do it, which minimises the burden of payback for the borrowers. However, a specified sum must be repaid annually according to the borrower’s preference.
  • This program will also assist in removing legal, operational, and other institutional impediments for enterprises.
  • It might be a very beneficial boost for employment development, resulting in the socioeconomic empowerment of Dalits, tribals, and women.
  • It may also serve as the impetus for other government initiatives, such as “Skill India” and “Make in India.”
  • It will help safeguard India’s demographic dividend.
  • With access to bank accounts and technical knowledge, these social strata will achieve financial and social inclusion.

Our country is experiencing an employment crisis. India has experienced a significant surge in unemployment. Only developed cities receive support for the establishment of new industries. Mr. Narendra Modi, the prime minister of India, devised the Stand-Up India initiative to boost entrepreneurship among women and SC/ST category individuals.

The intention is to provide funding not only to huge institutions, but also to the average citizen. The interest rate on approved loans is the absolute minimum that banks are able to give. As the loan has a lengthy repayment duration and a lengthy moratorium, it is simple to repay. The lengthy payback time decreases the borrowers’ worry. You must maintain minimal security against the approved loan. If you are an investor, you should apply for a stand-alone loan subsidy because it provides numerous benefits to the average individual.

What is TReDS and why was it developed? - By Egniol

What is TReDS, and why was it developed?

TReDS is essentially an online auction process for trade receivables, also known as discounting bills. In other words, it satisfies necessary short-term financing. TReDS allow trade receivables to be financed by a number of different lenders. Invoices and bills of exchange are both discounted under this plan. Credit is extended to the vendor, and the discount represents interest paid to the financier. There will be direct participants in TReDS from a variety of sectors, including buyers like government agencies and public sector organisations.

The Reserve Bank of India (RBI) has implemented the Trade Receivables Discounting System (TReDS) to make it easier for Micro, Small, and Medium-Sized Businesses (MSMEs) to obtain financing or discounts on their trade receivables from a variety of lenders. Companies, as well as government agencies and Public Sector Undertakings (PSUs), may be the source of such receivables.

For the many issues that arise from late payments, especially for MSMEs, this is a simple solution.

  • Lack of available funds prevents the company from growing and taking on new projects.
  • Expenses for maintaining normal operations can’t be met because cash flow is inadequate.
  • Negative effects on relationships and brand reputation due to late payments to vendors.
  • Due to not being able to pay off debts, your credit score will suffer, making it difficult to obtain credit in the future.

Over INR 500 crores in annual revenue necessitates use of the TReDS platform, as of 2 November 2018 per the Department of Micro, Small, and Medium Enterprises. Companies with a turnover of more than INR 500 crores and all Central Public Sector Enterprises are mandated to adopt a TReDS platform, according to the notice. As a result, these businesses are now required to become TReDS members.

For the purpose of ensuring that this notification is followed, the Registrar of Companies (RoC) in each state has been designated as the competent authority.

As a result of TReDS

  • MSMEs now have greater access to financing at competitive rates without having to provide additional collateral. Additionally, the financing is nonrecourse to the MSMEs.
  • Through better vendor financing negotiation, corporations can reduce procurement expenditures.
  • Multiple financiers have the opportunity to build Priority Sector Lending (PSL) asset portfolios on Trade Receivable Exchange platforms which aim to provide MSMEs with supply chain-related cash flow financing at competitive interest rates.

What is the Electronic Functioning of TReDS?

Trade Licence - Why is it needed? - By Egniol

The invoice can be uploaded to the electronic platform by micro, small, and medium sized businesses. In India, the fee increases to 750 INR. After that, it is sent digitally to companies or retailers like Honda, Mahindra, Tata, etc., who are potential buyers, with the expectation of acceptance within a given time frame. The lenders provide discounts to the buyers and the winning bidder is the one who pays the interest rate, whether that’s the seller or the buyer. The seller’s account is credited by corporates or banks the following business day after the final settlement is processed by TReDS. The money is paid back to the financier at a later date. Invoices can’t go for less than the RBI-mandated MCLR (marginal cost of funds based lending rate).

During the on-boarding process, entities are required to submit KYC related documents along with resolutions or specific documents to the authorised personnel in order to ensure there is no window dressing. The MSME vendor would be given access credentials like usernames and passwords. Participants in TReDS would reach a one-time agreement among themselves. When a factoring unit is accepted, the buyer is bound by the terms of this master agreement, which includes the obligation to pay on the due date. There would be no recourse provided and no set offs would be allowed for disputes involving the quality of the goods.

In other words, TReDS facilitates the uploading, accepting, discounting, trading, and settles the invoices/bills of exchange of MSME Supplier by bringing together MSME Suppliers, Buyers (i.e. Corporates, Government Departments, and Public Sector Undertakings), and Financiers (i.e. Banks, NBFCs, and Financial Institutions). A valid invoice is uploaded by the MSME Supplier to the TReDs Platform, where it is checked for accuracy and given final approval by the Buyer. Approval triggers a bidding process in which multiple Financiers offer reduced rates on the approved invoice. If the MSME Supplier decides to accept the bid, it can do so at its own discretion; once the bid is accepted, the payment is processed, and the MSME Supplier’s account is credited with the discounted amount.

Benefits of TReDS for MSMEs

  • Quicker payments – MSME sellers typically receive funds within 48 hours of receiving approved invoices.
  • Multiple financiers – The TReDS provides MSMEs with a broader range of financial options. They can select the lowest bidder from among several financiers.
  • Borrowing without recourse means that MSMEs are not obligated to repay the financier if the buyer fails to repay.
  • Lower funding costs – TReDs use a transparent bidding process that enables MSMEs to find the best quote. Due to the buyer’s credit rating, the seller can obtain financing at competitive terms.
  • Off-balance-sheet financing – The TReDs provides a collateral-free bill discounting service that does not affect the balance sheet of the business’s other expenses because it involves the sale of receivables.
  • Working capital without collateral – Sellers can meet working capital requirements by bill discounting unpaid invoices.
  • Business expansion is made easier with timely payments and a consistent record of meeting working capital requirements.

TReDS is a digital portal. It enables MSMEs to obtain funds in advance against trade receivables. They can now more easily meet liquidity needs and better manage their business thanks to the increased speed with which they can access funds. 

Everything you must know about SWOT Analysis - By Egniol

Everything you must know about SWOT Analysis

What is a SWOT Analysis?

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework for evaluating a company’s competitive position and developing its strategic plan. Internal and external factors, as well as present and future potential, are evaluated by SWOT analysis.

The purpose of a SWOT analysis is to facilitate a realistic, fact-based, data-driven examination of the strengths and weaknesses of an organisation, its initiatives, or its industry. The organisation must maintain the accuracy of its analysis by avoiding preconceived notions or grey areas and focusing on real-world contexts. Companies should utilise it as a guide, not as a prescription.

Comprehending the SWOT Analysis

SWOT analysis is a method for evaluating the performance, competition, risk, and potential of a business, as well as a product line, division, industry, or other entity.

Using internal and external data, the technique can steer businesses toward strategies that are more likely to be successful and away from those that have been less successful or are less likely to be successful. They can also seek advice from independent SWOT analysts, investors, or competitors regarding whether a company, product line, or industry is likely to be strong or weak and why.

Elements of the SWOT Analysis

Everything you must know about SWOT Analysis - By Egniol

Every SWOT analysis will include the four categories listed below. Despite the fact that the elements and findings within these categories will vary from company to company, a SWOT analysis is incomplete without the following:

Strengths

Strengths describe what an organisation excels at and what sets it apart from the competition: a strong brand, a loyal customer base, a strong balance sheet, and so on. For instance, a hedge fund might have developed a proprietary trading strategy that outperforms the market. The organisation must then determine how to use these findings to attract new investors.

Weaknesses

Weaknesses prevent an organisation from reaching its full potential. A weak brand, a higher-than-average turnover, high levels of debt, an inadequate supply chain, or a lack of capital are areas where the business must improve to remain competitive.

Opportunities

Opportunities are favourable external factors that could provide a competitive advantage to a business. If a country reduces tariffs, for instance, a car manufacturer can export its vehicles to a new market, thereby increasing sales and market share.

Threats

Threats are elements with the potential to cause harm to an organisation. A drought, for instance, poses a threat to a wheat-producing company because it can destroy or reduce crop yield. Other common threats include rising material costs, intensifying competition, and labour shortages, among others.

SWOT Table

Analysts present a SWOT analysis as a square divided into four quadrants, with each quadrant devoted to a component of SWOT. This visual layout provides a concise summary of the company’s position. Although not all of the points under a particular heading may be of equal significance, they should all provide essential insights into the balance of opportunities and threats, benefits and drawbacks, etc.

The internal factors are typically placed in the top row and the external factors in the bottom row. In addition, the items on the left side of the table represent more positive/favourable characteristics, whereas the items on the right represent more negative/worrisome characteristics.

Strengths

Weakness

Opportunities

Threats

Advantages of a SWOT Analysis

Everything you must know about SWOT Analysis - By Egniol

SWOT can’t answer all of a company’s questions. SWOT analysis helps with strategic decision-making.

It simplifies complex problem-solving. There may be too much data and relevant factors to consider when making a complex decision. By paring down ideas and ranking bullets by importance, a SWOT analysis can aggregate a large, potentially overwhelming problem into an easier-to-understand report.

The analysis requires external consideration. Too often, a company may make decisions based on internal factors. External factors can affect a business decision’s outcome. A SWOT analysis considers internal and external company factors.

SWOT analysis applies to most business questions. A company, group, or individual may be analysed. It can also analyse a product line, brand change, geographical expansion, or acquisition. SWOT analysis has many uses.

It uses multiple data sources. A company’s strengths and weaknesses are likely determined by internal data. The company must also collect external market, competitor, and macroeconomic information to identify opportunities and threats. A good SWOT analysis uses multiple, non-biased sources.

This analyses aren’t always expensive. Some SWOT reports aren’t overly technical, so many employees can contribute without training or outside consultation.

Why Do We Use SWOT Analysis?

A SWOT analysis is utilised to strategically identify a company’s improvement opportunities and competitive advantages. In addition to analysing the positive aspects of a company, SWOT analysis examines its weaknesses. Using this information, a business can make more informed decisions to preserve what it does well, capitalise on its strengths, mitigate risk associated with its weaknesses, and prepare for future events that may negatively impact the business.

The Final Analysis

The purpose of this analysis is to help with business strategy meetings. Everyone should discuss the company’s strengths and weaknesses, opportunities and threats, and ideas. Often, the SWOT analysis you envisioned before the session changes to reflect factors you missed without the group’s input.

It can be used for general business strategy sessions or for marketing, production, or sales. Before committing to a strategy, see how the overall SWOT strategy affects the segments below. You can also combine segment-specific and overall SWOT analyses.

SWOT has limitations as a planning tool. It should not be used alone when planning a business. Not every category point is equally important. SWOT isn’t weighted. Deeper analysis and a different planning method are needed.

What is a Business Risk & How can it be recognised? - By Egniol

What is a Business Risk & How can it be recognised?

What is Business Risk?

A company’s or organisation’s exposure to the possibility of experiencing decreased profits or complete failure is known as “business risk.” A business risk is anything that could potentially hinder the company’s progress toward its financial objectives. Many disparate elements can interact to increase the potential for loss for a company. Business risk can be increased when decisions are made at the highest levels of an organisation that are counter to the best interests of the company.

It’s possible, though, that a company’s exposure to risk has an external source. As a result, it’s impossible for a business to completely avoid peril. However, there are ways to reduce the impact of these risks on your business, and most companies do this by implementing a business risk management strategy.

Understanding Business Risk

A company’s ability to generate profits for their shareholders and other stakeholders could be jeopardised by the presence of significant business risk. The chief executive officer (CEO) of a company bears ultimate responsibility for the success or failure of the company, and his or her decisions can have a significant impact on the company’s bottom line.

Among the many variables that can affect a company’s business risk are:

  • Sales volumes, product popularity, and consumer tastes
  • Retail and production expenses
  • Competition
  • Global economic conditions
  • Rules set by the government

A lower debt ratio in the capital structure may be chosen by a company with a higher business risk profile to guarantee the regular payment of all debts. In the event of a decline in revenues, a company with a low debt ratio may be unable to meet its debt obligations (and this may lead to bankruptcy). On the other hand, when revenues rise, a firm with a low debt ratio is better able to meet its financial commitments thanks to increased profits.

Analysts use just four straightforward ratios—contribution margin, operation leverage effect, financial leverage effect, and total leverage effect—to quantify risk. Analysts can use statistical methods for more involved computations. Strategic risk, compliance risk, operational risk, and reputational risk are the most common types of business risk.

Diverse Forms of Corporate Risks

What is a Business Risk & How can it be recognised? - By Egniol

Strategic Risk

Any time a company deviates from its business model or plan, it introduces strategic business risk. It can be difficult, if not impossible, for a company to achieve its objectives if its operations deviate from its business model. An example of a strategic risk for Walmart would be if the company chose to position itself as the low-cost provider and Target then decided to undercut Walmart’s prices.

Compliance Risk

Compliance risk is the second category of dangers that a company faces. It is in highly regulated sectors and industries where the risk of noncompliance is greatest. The wine industry in the United States, for instance, employs a three-tier distribution system in which wholesalers sell wine to retailers who in turn sell it to consumers (who then sells it to consumers). Due to this system, wineries can no longer sell their wares directly to stores.

Numerous states in the United States, however, do not use this distribution system, so there is a risk of noncompliance when a company fails to learn the specific regulations of the jurisdiction in which it operates. A company runs the risk of breaking distribution laws in individual states if this happens.

Operational Risk

Thirdly, operational risk is a form of business risk. This threat comes from within the company and is most evident when normal business functions are ineffective. When HSBC’s internal anti-money laundering operations team failed to effectively prevent money laundering in Mexico in 2012, the bank faced a significant operational risk and was penalised heavily by the U.S. Department of Justice.

Reputational Risk

What is a Business Risk & How can it be recognised? - By Egniol

If a company’s reputation is damaged, for whatever reason (including but not limited to the occurrence of an event that was the result of a previous business risk), it runs the risk of losing customers and seeing brand loyalty plummet. HSBC’s standing in the market dropped after it was penalised for lax anti-money laundering procedures and subsequent fine.

The unpredictability of business risk makes it impossible to eliminate it entirely. Yet, there are a variety of tactics that companies can use to mitigate strategic, compliance, operational, and reputational risks.

When developing a business strategy, the first step for most brands is to pinpoint all potential danger areas. These dangers can come from both external sources and internal factors. It’s crucial to take measures to reduce business risks as soon as they become apparent. If there are any risks that can be identified, management should devise a strategy to mitigate them before they escalate.

Once a company’s management has devised a strategy for mitigating a risk, they should take the extra step of documenting the process in case a similar situation arises in the future. After all, risks in business tend to recur in cycles, just like the economy.

At the end of the day, most businesses implement some sort of risk management strategy. This can happen either before the company starts up or after it has encountered a setback. The goal of risk management is to make a company more resilient to the various threats it faces. In the event of an emergency, the plan should include tried and true ideas and protocols.

Effect of Goods & Services Tax (GST) on the Indian Agricultural Sector - By Egniol

Effect of Goods & Services Tax (GST) on the Indian Agricultural Sector

Indian Agricultural Sector & GST

Ever since GST was implemented across India in 2017, it created quite a stir as to how would things work, how it would impact various sectors, how would people get GST credit, and how it would reduce indirect taxes. Today we look at 2017 to 2022 how it has affected the Indian Agricultural Sector.

GST in India

To first understand the impact of GST we need to understand what is GST, the agriculture in India and then GST’s mark on it. In a nutshell, GST is Goods & Services Tax which went live in 2017 after a series of board meetings, the process of implementation and amendment bills. After the approval of Lok Sabha & Rajya Sabha, this new tax system was implemented to reduce a range of indirect taxes such as Value Added Tax (VAT), Service Tax, Purchase Tax, Excise Duty and so on which were being levied from the people. So, it is 1 tax that is applicable all over India.

Agriculture in India

The agriculture sector is crucial to the growth of the Indian economy. Rice, wheat, sugarcane, and spices are just a few of the agricultural products that India produces and exports to other countries. Agriculture is one of the key businesses providing employment in rural India. Consequently, taxation on the agricultural industry is quite important to the economy. The greatest contributor to India’s overall GDP is the agriculture sector. It accounts for roughly 16% of the Indian GDP.

In India, the agriculture industry is largely excluded from the GST. In essence, agricultural products including fresh seafood, dairy, fruit, and vegetables are exempt from the GST.

Positive Impacts of GST on Agri-Activities

Effect of Goods & Services Tax (GST) on the Indian Agricultural Sector - By Egniol

1. Better Supply Chain
Under the new regulations, no tax will be levied on the storage, which will lower the farmers’ tax burden. It also has reduced food waste associated with storage tax and has provided farmers with the opportunity to sell their goods at a good price.

2. Input Tax Credit with Tax Exemption
Each dealer is provided with an Input Tax Credit (ITC) for the tax previously levied for each addition. This creates a transparent and hassle-free system while the movement of agri-food. The previously imposed surplus tax is only collected (on consumption) if agricultural products are marketed by manufacturers or on the output of goods.

3. Reduced Transportation Time
As agricultural products are perishable, their transportation plays a vital role while distributing them. As a single tax rate has been imposed, it should empower and strengthen as now transporting has become convenient.

4. Intergovernmental Trade Made Easy
Earlier during intergovernmental trade, a lot of permissions and licences were required from states and which made every transaction difficult. This led to a lengthy process and there were complications when agricultural products needed to be transported. Because of GST, a lot of loopholes in this process have now gone, making the trade of such items very smooth.

Future Plans to be Achieved by GST

Effect of Goods & Services Tax (GST) on the Indian Agricultural Sector - By Egniol
  1. The overall aim of GST has lessened the burden on the agricultural industry. However, the government has had to increase taxes on items like fish, meat, chicken, dairy products, condensed milk, dried fruit, jellies, and other items. With time, the government plans to reduce taxes on the same, so there’s a balance maintained.
  2. The building cost has marginally increased because of 18% GST but on the other hand, people would be paying less tax overall.

Conclusion

Numerous indirect taxes, particularly agricultural taxes, were reorganised as a result of this unified tax. Farmers are allowed to sell agricultural products under the same tax structure on numerous markets and in several states, and hence the GST structure is essential to enhancing the agricultural sector.

Egniol Group of Companies has already helped more than 20,000 Indian Startups and MSMEs by providing start-up consultancy, and digital & legal services, so they can focus on their core strengths while we do the rest for them.

If you are an agri based start-up, you can get funding by enrolling under great schemes by the government. Get in touch with us at info@egniol.co.in for a detailed consultation and eligibility criteria.

Animal Husbandry Infrastructure Development Fund (AHIDF) - By Egniol

Animal Husbandry Infrastructure Development Fund (AHIDF) – A Key Decision

What is Animal Husbandry Infrastructure Development Fund (AHIDF)?

The Union Cabinet approved the Rs. 15,000-crore Animal Husbandry Infrastructure Development Fund (AHIDF) on 24.06.2020 as part of the Atma Nirbhar Bharat Abhiyaan stimulus package to guarantee growth in a variety of sectors, and its implementation guidelines have now been released.

India is working on improving cow breeds to raise milk output and is also tending to the processing industry. Milk production in India is currently at 188 million tonnes, but is forecast to increase to 330 million tonnes by 2024. However, the government is making an effort to increase that number to 40% from its current level of 20-25%.

In addition, it was disclosed that the Dairy Processing Infrastructure Development Fund (DIDF) is currently being put into action for infrastructure development in the cooperative sector, and that the Alternative Housing Infrastructure Development Fund (AHIDF) is the first scheme of its kind for the private sector.

After the necessary facilities are built, millions of farmers will benefit from the increased milk processing. Additionally, this will boost the already-modest export of dairy products. India’s Dairy industry must improve so that it can compete with that of New Zealand. Even with the Covid-19 lockdown, farmers were able to keep milk flowing to stores and consumers, to their satisfaction.

The government has been implementing various schemes to incentivize the investment made by the dairy cooperative sector towards the development of dairy infrastructure. The AHIDF was established because it is important to encourage and reward private sector participation in processing and value addition by SMEs and other businesses. The establishment of a private sector animal feed plant, as well as the establishment of a dairy and meat processing and value addition infrastructure, would be greatly aided by the availability of AHIDF.

Objectives of AHIDF

  • Fostering entrepreneurial spirit and creating new jobs
  • To Improve exports and raise the proportion of milk and meat products sold abroad.
  • To aid in expanding India’s ability to process milk and meat
  • To allow for more producer price realisation.
  • In order to provide the home market with high-quality milk and meat products
  • To accomplish our goal of providing our rapidly expanding population with sufficient, high-quality protein sources so that they can thrive.
  • To supply economically priced, high-quality concentrated animal feed for a variety of livestock and poultry species, including cattle, buffalo, sheep, goats, pigs, and hens.

Eligibility Criteria for AHIDF

Animal Husbandry Infrastructure Development Fund (AHIDF) - By Egniol

The Animal Husbandry Infrastructure Development Fund (AHIDF) provides financial assistance to the following types of organisations

  • Farmer-Producer Organization (FPO)
  • Private Corporations
  • Sole Proprietors
  • Organisations Eligible Under Section 8
  • Micro, small, and medium-sized businesses (MSMEs)

Farmer Producer Organizations (FPOs), Micro, Small, and Medium Enterprises (MSMEs), Section 8 Companies, Private Companies, and Individual Entrepreneurs (with a minimum 10% margin money contribution) would all qualify as beneficiaries of the Scheme. Scheduled banks would provide the remaining 90% in loan funding. Recipients who qualify will receive an interest subvention, from the Indian government of 3%. The loan’s principal amount will be forgiven for two years, and borrowers will have six years to pay it back after that.

Furthermore, the NABARD would be entrusted with managing a Credit Guarantee Fund established by the Indian government. Projects that have been approved and fall within the limits set by the MSME will receive a credit guarantee. The amount of the borrower’s credit facility that would be covered by the guarantee is limited to 25%. SIDBI’s Udyami Mitra portal is a convenient way for potential borrowers to apply for a loan from a scheduled bank in order to finance the purchase of machinery and equipment needed to begin or expand a dairy or meat processing and value addition operation.

Animal Husbandry Infrastructure Development Fund (AHIDF) - By Egniol

There is a significant opportunity that can only be realised with private sector investment. With the help of the INR 15,000 crore AHIDF and the interest subvention scheme for private investors, sufficient funds will be available to cover the initial investment needed for these projects. As a side benefit, these investments in processing and value addition infrastructure by eligible beneficiaries would boost exports of these processed and value added commodities.

Due to the fact that between half and two-thirds of the final value of dairy output in India is returned to farmers, the prosperity of this industry has the potential to have a dramatic effect on farmers’ incomes. The growth of organised off-take by cooperative and private dairies is directly correlated with the size of the dairy market and the income realised by farmers from milk sales.

Therefore, encouraging investment in AHIDF would not only result in a sevenfold return on private investment but would also encourage farmers to spend more money on inputs, which would boost productivity and, in turn, raise farmers’ incomes. Additionally, 35 lakh people would benefit from the approval of measures through AHIDF by creating direct and indirect employment opportunities.

According to the Hon’ble Union Minister of State for Fisheries, Animal Husbandry, and Dairying, the Government has decided to vaccinate 53.5 crore animals, with 4 crore animals having already been vaccinated. Technology is being used to better breeds of animals. Still, the processing industry is where we fall behind. Additionally, processing plants for fodder can be built with the help of the AHIDF. This will assist in realising the Hon’ble Prime Minister’s goal of a five trillion dollar economy and doubling farmers’ incomes.

More than half of the people in rural areas rely on livestock for their income. Nearly nine percent of working-age Indians can thank it for their livelihood. The livestock population in India is enormous. The livestock industry accounts for 4.11% of total GDP and 25.6% of the total Agriculture sector.

We at Egniol not only help you apply for the Animal Husbandry Infrastructure Development Fund, but we also help you find and apply for a variety of other government programmes that will benefit you.

Affiliate Marketing in India - Beginner's Guide - By Egniol

Affiliate Marketing in India – Beginner’s Guide

What is Affiliate Marketing?

One might wonder what affiliate marketing is, but the fact is that all of us have seen it but are just unaware of the terminology. So think, when was the last time you wanted to buy a phone, laptop, jacket, a BBQ grill, a pair of shoes, a nice watch or anything for that matter, and you went on to look for videos on YouTube which gave you to a tutorial/review of it. Either that, or you did not want to buy a product and just came across an ad and wished to buy it. You could also have browsed something like “Best chairs under ₹10,000” which gave you an article to help you reach a decision.

In all cases, there would be a link which you’d follow to reach a certain landing page where you could buy the product. If the creator or marketer who produced that piece of content provides you with their own link to buy it, then it is called an affiliate link, from which they make money. In other words, affiliate marketing is when you advertise the products or services of other people on your website in exchange for a cut of the sales you bring in. Commissions are frequently a proportion of the sale price, but sometimes they may be in the form of a fixed sum. 

Below 6 points will help you understand and get started with Affiliate Marketing

1. Choose a platform

With a wide range of social media platforms available, choosing a suitable platform is crucial when starting with Affiliate Marketing. However, for affiliate marketing, the 3 main effective platforms are Blogging, YouTube and Instagram. Blogging refers to creating your own website and providing informative SEO-optimized articles which would then take a reader to a certain product affiliate link. Similarly, on YouTube & Instagram, you would create static or video content in order to entice an interested buyer to click on the links.

2. Select a Niche

Affiliate Marketing in India - Beginner's Guide - By Egniol

Exploring all the categories or focusing on multiple things on the same website, Instagram or youtube can become a problem as your audience wouldn’t be able to connect well with you. Instead, catering to a similar kind of audience at one time generates more trust and gains you more affiliate partners.

It is preferable to engage with seasoned experts or influencers who create content for their audience. Professionals can assist you in producing reliable content that will increase traffic, keep readers interested, and increase affiliate sales.

3. Identify & Join Affiliate Programmes

Primarily there are 2 types of programs which are:
A) High-paying, low-volume affiliate programs
B) Low-paying, high-volume affiliate programs
There are other types too, but it is essential for beginners to understand these two before going any further.

In program A, the end product is a high ticket size product and usually sells less in volume. For example, a mid-range Business Software would cost around ₹20,000/month for which an affiliate marketer would make around 30%, but the pool of buyers will remain limited.

In program B, the product is usually one which has a higher audience and sells a good volume, but an affiliate marketer would make a small percentage for every product sold.

4. Drive Traffic to your Affiliate site by producing Excellent Content

Research was conducted where people were asked where they research and buy products that cost $100, and they mentioned names of popular affiliate sights. After all, providing value to the reader who has visited your website is what creates a lasting impact.

An organised YouTube channel with helpful playlists about gadgets, lifestyles, appliances, culinary or any area, and Instagram guides, pre-planning festive guides are some avenues where you can create good content.

5. Get People to Click on your Affiliate Links

Affiliate Marketing in India - Beginner's Guide - By Egniol

It is important that enough stress is laid on the fact that the consumer of your content clicks on YOUR link first. This has to be reiterated as only if your link is clicked, a cookie will be generated so that even if the person does not buy your product at that moment, it is confirmed that they indeed visited the product page through you and not manually searched for it themselves.

For example, if a person clicks on the affiliate link of the product you’ve advertised, it’s possible that they’re looking around and would come back later. Even though they visit the website on their own later and purchase, you an affiliate marketer will still get a certain amount just because the driving factor was the affiliate link.

6. Clicks → Sales

Not every click will result in a sale, but certain tactics can be implemented to boost that conversion. Looking for merchants with programs that already have a good conversion rate is a good idea, to begin with.

Over time, you will start getting more clicks, but as you know, it’s the actual sales that count in affiliate marketing. However, there are a few brands that also pay an affiliate marketer based on the visits if getting consumer reach is their goal.

Egniol Group of Companies aims to revolutionize Indian Startups and MSMEs by providing start-up consultancy, and digital & legal services, so they can focus on their core strengths while we do the rest for them.

If you are a start-up and need services like seed funding, government programs and other information, get in touch with us at info@egniol.co.in.