Rising Steel Prices: Can Fintech save MSMEs in distress?

The Alumni Relations Committee of IIM Kashipur has served as a bridge to beget valuable insights about the role of Fintech in MSME from our erudite alumnus. This article covers the questions surrounding the issue of rising steel prices and how Fintech can save the MSMEs in distress.

A sharp rise in raw material prices, (especially steel) over the last few months has impacted the recovery of manufacturing, construction, and small and medium industries from the COVID-19 pandemic.  The MSME industry needs to provide steel at reasonable prices so that export competitiveness of value-added products is maintained

A sharp rise in raw material prices, (especially steel) over the last few months has impacted the recovery of manufacturing, construction, and small and medium industries from the COVID-19 pandemic.  The MSME industry needs to provide steel at reasonable prices so that export competitiveness of value-added products is maintained.

Fintech lending platforms have the ability to address the credit gap for small businesses. Most digital lending platforms which used to rely only on equity and debt capital are now also looking at post loan origination sources of capital such as securitization and direct assignment transactions to improve liquidity. The fintech, banks, and NBFCs will play a huge role in powering small businesses in the post-pandemic new world and will help in reviving the economies. These new and innovative lending models will not only strike a right balance between financial stability and growth but also encourage a focus on the credit needs of small businesses in the country and NBFCs and fintechs are considered as better equipped to support this endeavour.

To understand the reasons behind the bullish prices, we can look at some of the factors affecting the price of steel:

Supply And Demand-

As with any commodity, supply and demand is a huge factor that determines steel prices. The higher the demand and the lower the supply, the higher the price. As lockdowns were gradually eased and construction work resumed, steel prices started rising with the rise in demand.

Moreover, the prices of steel are determined not just by current supply and demand, but by forecasted supply and demand. The more information available, the better this can be predicted, and the less volatile prices will be. We must also strive to be aware of inventory in the supply chain in every link from the steel mills to the end-user.

Industry Trends-

Price is also influenced by the demand of the various industries steel is used for. If the auto industry is strong, for example, steel demand may be higher; the same goes for construction, packaging, and other businesses that rely heavily upon steel.

Costs of Materials-

Scrap metal and iron ore are two of the main materials used to create steel. If there is a limited amount of these resources available, demand exceeds supply, and the cost of materials will jump up.

Iron ore fetching a year-end price of $175 a tonne on the Dalian Commodity Exchange (DCE), is now the world’s best performing major commodity for the second year in a row. Indian Steel Association (ISA) calls for Government Intervention and demands a six-month ban on iron-ore exports, restriction of e-auction sale to steel- and pellet-makers. The Government suspects that the steel-makers might be indulging in the manipulation of production to lift prices, forming a cartel in the cement and steel industry. However, on the contrary, in the steel industry where two major players, namely, SAIL and Vizag Steel are government-owned are also a part of the same trend.

Costs of Shipping-

By the same token, materials used to create steel and finished goods can be costly to ship, a factor that may help determine the price.

Time of Year-

Time of year has its effect on many industries, and those that use steel are no different. Holidays, weather, and seasonal highs and lows affect the output of new products, either raising or lowering demand. Seasonality can impact shipping patterns and transit modes.

All these events have left the MSMEs in jeopardy. Nothing was happening for several months because of the pandemic. The projects were shut down or were on hold. The rise in steel prices is eating into their narrow margins making it more and more difficult for them to sustain. A big issue of MSME credit gap can be solved by fintech lending platforms if they are able to access reliable digital data sets that can assist with credit risk analysis and cash flow-based lending, the regulatory framework supports a low-cost KYC and customer onboarding process and if these platforms themselves are able to tap into a wider set of channels for their own sources of capital.

About the Author:

Mr. Shahrukh Khan, an Alumnus of IIM Kashipur who has completed his PGP in the year 2019 is currently handling the Product & Process – OfCommerce at OfBusiness. While at the campus, he has been a Class Representative and Joint Secretary of Wellness Coordinators. He has also represented IIM Kashipur in multiple TT Tournaments.

Story of successfully hosting Uttishtha- The Annual Entrepreneurship Summit amidst the pandemic!

What we are going to read about will be sort of a story (Fairy Tale! Nothing short of that!) of ‘The Spring in the North’! – The Spring rejoiced by young entrepreneurs, startup owners, industry experts, faculties, college and school children from across the country. Yes, we are talking about Uttishtha – The Annual Entrepreneurship Summit of IIM Kashipur – The Spring of Entrepreneurship!

Here is the story by Team E-Cell about how they managed to pull off the event amidst difficulties posed by the pandemic!

Uttishtha is the much-awaited Entrepreneurship Summit which has an objective of revolutionizing how people view entrepreneurship and create an indelible impact in the entire startup ecosystem of the country and beyond!

The restrictions imposed on us due to COVID-19 and taking into consideration the safety of all the stakeholders of the event, we were forced to organize an event of such high magnitude on a virtual platform, which in turn meant restructuring of the entire Summit.

We, the entire E-Cell Team, decided to break the entire summit into small tasks and decided to go about the event in a phased manner. Subsequently we divided the entire summit into 3 phases, namely, the planning stage, the preparation stage and the summit!

So, we divided the team according to the preferences and expertise of the members and set off on our Voyage of “Making Entrepreneurship Bloom”!

The Planning Stage:

We all knew that Uttishtha’21 was going to be a completely new experience for all the stakeholders and we precisely knew that to create maximum value for everyone we had to restructure the entire summit upside down and planning or ‘Out of the Box’ sessions, we used to call them, were going to be the most important element of the entire summit!

The Importance of a Business Plan for MSMEs - AREAFENCING

In Uttishtha’21, as we were revamping almost everything, we decided to go beyond the mainstream in everything we were doing! While deciding the theme of the event, our thought process was to keep a theme that portrayed new beginnings, asked people to get rid of their winter blues (COVID blues!) and focus on embarking on the journey of 5R, namely, Rejuvenation, Regrowth, Resurrection, Renewal and Regrowth! So, with a decision to keep the whole Summit light and bright, we decided to keep the Theme – “Spring”, or the “Spring of Entrepreneurship”, more holistically!

We believe, the first major challenge that came towards our way in the planning stage was in the form of event crafting and flow mapping! We knew, that events of last year needed a major revamp, if we were to create the Summit engaging and create value for the people involved! Last year Uttishtha, had events like Startup Exhibitions, Entrepreneurship Bootcamp and Expo, which could not be conducted online given the nature of the events. So, we needed to come up with events which could fill the space of these events and so we started brainstorming on the needs and wants of all the stakeholders and subsequently came up with new events such as Not Clubhouse – focused panel discussion sessions, firechat conversation – a dialogue between experts from completely different areas, co-founder dating – a virtual internship fair for students across the country, among others! The molding of events according to the theme of the summit and requirements of the stakeholder involved, was a fun-filled experience!

We believe, ‘Uttishtha’ is an epitome of collaborative effort and it sees contribution and cooperation from each and every member of the IIM Kashipur community. After the planning of events and identifying the work areas, it was very important for us to gather support from the community and form an enthusiastic team comprising people who were motivated enough to work on the event diligently. Given the lack of physical interaction with the people involved, in a virtual setting, it was a bit difficult to find the real potential of the applicants. But after due process, we were lucky enough to have found a team, where members were on their toes to make the best out of the opportunity provided. Given the virtual nature of the event, the division of the functional teams had to be revamped where traditional functional teams such as arrangement teams, People management team and promotions team among others had to be dropped off the chart and made way for new teams such as virtual platform team, Audience engagement team and social media team among others.

The Preparation Stage:

Uttishtha’21 being virtual posed a lot of challenges in the execution of ideas, but along with the challenges involved, it also provided us with a lot of opportunities with respect to the extended reach of the event.

Challenges |

The main challenge that the team had to endure while executing the plans was the possibility of miscommunication at times due to lack of physical interaction leading to redundancy of work. Also, too much follow up on the tasks slowed down the process of execution of plans. Although these were challenges which were natural to come in a virtual setting, the dedicated and mindful work of different functional teams ensured smooth operations throughout.

The teams working on onboarding industry experts, dignitaries, speakers, startup founders, school administrators and students had a large pool of people to target given that there was no need to look after travel and lodging arrangements of the guests and with the click of a button experts could join the sessions. This not only allowed us to reach out to people beyond boundaries, but also opened wide range of opportunities for the teams to reach out to people of high stature. One approach that stand out during the whole process was the use of quirky tweet threads on twitter to reach out to people. The choice of this unconventional way led to us having onboarded a lot of good speakers and industry experts.

One of the tasks, that took substantial amount of our time was choosing an ideal virtual platform for the Summit. It proved to be an exhaustive process, given we had certain criteria such as neat user interface (UI), easy accessibility and usability, and comprehensiveness with respect to functions among others in our mind.  We tried out nearly 12 virtual event platforms before narrowing down on “Airmeet” for conducting the Summit, which we believe served our purpose well.

The digital media team had a humongous task in hand, given they were responsible for creating all the buzz around the event and getting the word across boundaries. They came up with innovative ideas to promote the event to the best of their abilities. With the support from Media and Public Relations Committee (MPRC), the team was able to forge meaningful partnerships with various media partners such as Amar Ujala, Campus Beat among others which helped the team in multi-channel promotions of the event. The digital marketing team came up with numerous creatives and took advantage of all social media opportunities (paid as well as unpaid) to promote the Summit.

The Summit (5th March – 7th March):

Team Uttishtha Meet! Date (4 March, 2021), Time: 10:00 PM! Each and every member from the entire team was there. We all had our cameras switched on! We all were from different functional teams, we all had completely different tasks assigned, but one thing common in all of us was the satisfaction we had with the level of preparedness for the summit that was going to commence next day morning. We all were pumped up and were fully motivated to make the summit a memorable one for everyone and enjoy the three-day summit to the best of our abilities.

Finally, the Spring of Entrepreneurship was here! The first day started off as a warm breeze with esteemed speakers showering their wisdom on the attendees. The first day saw the presence of dignitaries like Mr. Arun Pandey (Chairman and MD, Rhiti Sports), Subhadeep Sanyal (managing partner, Omnivore) among others. We expected that getting the speakers and attendees accustomed to a fairly new platform like ‘Airmeet’ and ensuring the smooth internet connectivity throughout the sessions were something which might play spoilsport during the events, but we are proud of our Techno-savvy team which kept technical issues at bay throughout the Summit.  

The Second and third day were going to be crucial days of the event given we had events lined up in those two days which overlapped too, the risk we had to take because of the limited time we had and plethora of events planned out! We had Clear Harvey workshop for school students, Udaan – a national level B-Plan competition, speaker sessions, panel discussions with school administrators planned out, which led to many of them overlapping. But unconsciously, the bond in the entire team and the culture passed on by our seniors helped us sail through roadblocks smoothly and conduct the events in a synchronous manner. It was great to see people taking ownership for their responsibilities and coming forward to take additional responsibilities! Last minute cancellations of few of the experts was something we always had in our mind, and we are happy that we had backups and plans to deal with those situations!

Overall, we can say that Uttishtha’21 was a roller coaster ride for each and every member of the team. Each turn had some challenge for us and we are proud and happy that we had our experienced seniors (our partners, supporters and mentors), who were not only there to show us the path but were there to handhold us through the trouble times. The support from the entire IIM Kashipur community helped us in making the event a national success!

Uttishtha’21 is indeed an epitome of collaborative effort!

Essential learnings from shift to online education amidst Covid-19

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The business schools have conventionally been staid in their approach to teaching methods — the area in which there have been but few innovative developments for decades. The face-to-face teaching-learning process still dominates despite the advent of online learning. Faculty prefer the face-to-face mode from the viewpoint of convenience in responding to questions from a mass of students, carrying out interactive discussions and explanations, derivations or solving problems on the whiteboard.

However, the change seems to be a constant in education. The paradigm shift in pedagogy to online mode offers one means of making such change due to pandemic. Online teaching is helping us to beat the Covid-19 lockdown and catch up with the academic schedule. Nevertheless, at the same time, I fear that the paradigm shift in pedagogy to online mode may alienate economically disadvantaged students who do not have access to digital classes.

We do have some essential learnings from the online classes.

  1. The online teaching-learning process in business schools is undoubtedly useful. In some ways, such as making (theory and lecture) more structured, promoting self-learning, and prior class preparation among students, reducing spoon-feeding, it is perhaps more effective than the face-to-face mode.
  2. Examinations need not be in sit on-campus mode; open-book take-home exams designed to assess higher-order thinking skills or online exams are more effective, at least at the post-graduate level.
  3. Blended learning as a pedagogy appears superior to the conventional face-to-face teaching-learning process from the student’s perspective, to cater to fast and slow learners equitably.

In general, I believe that the current crisis and the response mechanisms put in place by the institute and other leading business schools will bring about a paradigm shift in pedagogy and that these new teaching-learning processes will be more effective.

Dr. Sunil Kumar Jauhar

Assistant Professor

Operations Management & Decision Sciences

Switching to the virtual mode of learning during the pandemic

Imparting formal education has been traditionally conceived through a single-mode within a close setting. Within this concept, the learning and knowledge are possessed, selected, structured, and transmitted by a teacher to students. This mode does not provide an opportunity for the formation of a dialogue between a teacher and students. Though this mode is rationalized as the finest, the present scenario calls for constructing an alternative virtually based mode.

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Virtual or online mode creates a co-constructed approach in learning and facilitates the development of online learning communities. This approach allows students to engage actively in the discovery of alternative forms of knowledge and denaturalize the assumptions of a subject. This paradigm shift in pedagogy transmutes the usual transmission of knowledge into cooperative learning, assists in neutralizing the power relations between the positions of instructor and student and brings them together and elevates their creative potential.

In the context of higher education, this shift embraces constructivist pedagogy and technology. The philosophical assumption in constructivist pedagogy is the learner constructs a version of reality that is situated in a context of social interactions with other learners and institutions. As the shift promotes collaborative learning and enhances reflexivity, an action extends thought — reflection shaped by the consequences of the action. It allows learners to actively engage one another in ideas and perspectives they hold to be educationally valuable, exhilarating, and stimulating. It is through the design of the online learning environment, with an emphasis on shared educational goals, support, collaboration, and trust that these processes can be most effectively and functionally activated.

Dr. Rahul Ashok Kamble

Assistant Professor

Organizational Behavior & Human Resource

Dealing with the challenges of online mode of learning amidst Covid-19 pandemic

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COVID-19 pandemic has forced global experimentation in many facets of lives. Education can be one of the several arenas that this crisis is going to change. Learning online can be a lot more complicated than simply being acquainted with setting up a Zoom account or Google Classroom. Initially, I had two major instinctive apprehensions for remote teaching that could hold me back during the unprecedented transition from offline to online mode. First, being gripped by the mechanics instead of focusing on the purpose of learning. Second, the greater emphasis on the content alone. This pandemic has added an extra layer of complexity to the anxiety associated with online learning. Learning is more than just a transaction between an expert and a novice. So, as an educator, the major challenge was to overcome the temptation of embracing a narrow view of cognitive learning. Because socio-emotional learning is also crucial especially in situations of crisis when one’s anxiety is likely to be much stronger.

Socio-emotional distress like loneliness or anxiety can wear away our cognitive capability also. Therefore, for effective online learning, a balance of knowledge with a focus on people and emotions is required. A shared and holistic learning process in online mode was subject to other challenges like the digital divide, attention span (multi-tasking that we often do in online mode), low motivation, and novelty of online platforms. Virtual office hours provide that another window of conversation and connection that would have been missed in remote teaching. The crisis has caused some disruptions in the learning process but with some readjustments in online learning, we were able to address students’ disorientation as well as getting on with the curriculum. Online learning might be a short-term response to COVID-19 but it has paved way for a lasting digital transformation of education.

Dr. Preeti Narwal

Assistant Professor (Marketing)

Experiences and learnings from the paradigm shift in pedagogy to online mode

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The onslaught of online teaching-learning practices that entailed the COVID19 outbreak in recent times has outvied the traditional pedagogy of a physical classroom experience both from temporal and spatial contexts. The usual classroom environment has been replaced by a digital space where many of the teaching-learning assumptions are being questioned every day. It has brought new issues, challenges, and opportunities to the omphalos of educational praxis. At best, it has enthroned the learner at the centre and compelled the teacher to negotiate the curriculum through digital intermediaries and applications that were hitherto unknown to both. While the virtual reality has become new normal and opened up avenues for action research, it has once again startled many to the core. Being an abettor of open and distance education since the 1990s, for me, it was a long battle won at last. A battle that we lost innumerable times when our colleagues and fellow educationists vacillated the reliability and validity of teaching, learning and degrees earned through ‘distance mode’. Even after the establishment of an open university almost in every state, the government used to give public notices announcing that degrees obtained through distance education are equally ‘valid’. COVID19 has pushed all those egotisms to the periphery and firmly entrenched the online education system that is going to be the new paradigm for years to come, perhaps much after this pandemic.

While the traditional classroom is seen as a powerful space where the physical presence of the faculty is set as the apotheosis of knowledge, the online classroom has made the field more democratic. I am now au courant of the fact that unless and until I make the content attractive, relevant, and rich, the audience might just occlude me from his/her reality and I would be facing more blank screens (when students’ cameras are off). I can no longer afford to unleash the drudgery of monologues on the students and as such I have to deliver the content from with a design thinking approach where graphics, narratives, and the platform (e.g. Zoom) are all in sync with the theme of my session. The art and the aesthetics of audio-visual contents that were long considered the tinge of the media and journalism experts have now become the existential survival skill for the online faculty. The jury is out and the potential outcome of my delivering classes online over the last few months will perhaps reiterate an apophthegm that I heard from one of my senior colleagues — ‘to teach or not to teach, do whatever you like in class but never bore your students’. That fulmination looms much larger today for any teacher when both the dramaturgy and the stage have gone virtual and if something goes wrong it might even go ‘viral’.

As a researcher, while my field teams are cooling their heels at home, online classes have opened up an enormous space for conducting digital ethnography or Netnographic study from the comforts of our homes. That is an added advantage that would have perhaps remained in the penumbra, had we not been forced into this homebound exile by the pandemic. The Socratic classroom has taken a backseat for now and the flip-class has taken a lead in enriching students’ engagement and active learning at different levels. We are now more conscious of the difficulties, digital divides, affordability, and access issues in connectivity and the differentiated learning preferences of our disciples. That is a new nirvana for me to suspire for.

Dr K M Baharul Islam

Dean (Academics) and Professor (Communications)

Chair, Center of Excellence in Public Policy and Government

Embracing the online mode of learning in the new normal

आत्मानं सततं रक्षेत् (One must save oneself under any circumstances) is a famous quote by Swami Vivekananda. We all in academics did that under the COVID-19 circumstances to save ourselves from stagnancy, by embracing the online mode of teaching and learning.

Interestingly online education, distance mode of education, and learning through correspondence were earlier part of the non-formal education system but today the above mode of teaching and learning is being adopted by the formal education system too. Globally adaptation to the wave of change brought by COVID-19 has become the new normal. How long would this continue, that just depends on the solution scientists would decode to trash the virus! Duration of this new normal may call for change in the definition used for a long, to classify formal and non-formal education. What if the division between both the type of education (formal vs non-formal) based on the mode of teaching and learning, gets blurred! I am thrilled by the idea of more than analyzing its outcomes! Would it be really and only bad? Or there is some good in it as well? The answer lies only in the future.

What is happening at present on the academic front? In my attempt to respond to this I would like to say what the Great Greek Philosopher Cicero, said once, “Summum bonum” which in Latin means the “highest good”. Talking about the present scenario, dealing with the COVID-19 crisis was made possible by technology, by online teaching, was there any better way than this to ensure continuity and overcome stagnancy? Teaching and learning via Zoom (or any online platforms) is the highest good, the thing at this point. Online teaching and learning made possible using the online platforms have the capacity to radically revolutionize the education system, and I presume, it will be for the “highest good” of every stakeholder involved. So I think what has happened in our attempt to adapt and move on is “Good” and what is going to happen in future due to technological development, let’s hope it will also be “Good”.

Dr. Madhurima Deb

Associate Professor (Marketing)