Financial Stress in MSMEs: Practical Solutions, Resolution and Business Revival

The session opened with a candid assessment of the credit environment facing MSMEs across Delhi NCR, Mumbai, Bangalore and Tier-II manufacturing clusters. Mr. Deepak Narang drew on his years at e-UBI to walk participants through the early warning signals lenders now watch for — stretched creditor days, repeated ad-hoc limit requests, GST filing delays and mismatches between declared turnover and bank statement credits. The point was made clearly: by the time an account slips into SMA-1 or SMA-2, the promoter's negotiating room has already shrunk considerably, and proactive engagement with the banker weeks earlier changes the conversation entirely. Mr. Vipul Aggarwal and Mr. K K Gupta then took the discussion into the resolution toolkit itself — covering restructuring frameworks under the RBI's MSME dispensation, the mechanics of One-Time Settlements, and where SARFAESI and IBC realistically fit for smaller enterprises. Vidhi Devraj brought the promoter's lens to this, sharing how Devraj Industries approached its own working capital planning and vendor discipline, and why treating the CA and banker as strategic partners rather than compliance touchpoints materially changed outcomes. The panel also mapped funding sources beyond the traditional CC/OD route — NBFC structured credit, invoice discounting platforms, TReDS, private credit and the SME IPO window that has opened meaningfully over the last two years for businesses with the right governance in place. Mr. R Ramanan closed the substantive discussion by connecting financial discipline to the AI and data layer now available to MSMEs — how cash flow forecasting tools, receivables analytics and AI-led credit scoring are already shifting how banks underwrite smaller ticket sizes, and what promoters should be doing internally to be ready for that shift. The Q&A drew sharp questions on personal guarantees, promoter contribution during restructuring, and how to prepare a business for valuation ahead of a capital raise. The through-line across all four speakers was consistent: financial stress is rarely terminal when addressed early, and the legal, banking and capital-market options available to Indian MSMEs today are wider than most promoters assume.