SMEs advised to go for equity capital instead of debt

In order to drive the businesses in a healthier manner, the State Bank chairman Arundhati Bhattacharya on Friday urged the Small and Medium Enterprises (SMEs) to focus on raising funds through equity instead of debt.

“One of the major problems facing SMEs in our country is lack of equity. Equity capital is a much-neglected area in the SME sector,” Bhattacharya told an SME summit and asked them to learn from technology players which have sourced large amount of equity to ramp up their business and market share.

Quoting the examples of e-commerce companions like the Flipkart and Amazon, she said these firms have done wonders with the help of equity.