Almost one-third of start-up and SME entrepreneurs have seen a reduction in transactions, reduced fund-raising for expansion and a drop in account receivables after the demonetisation drive; but an overwhelming majority said the move will have a long-term positive impact.

These findings are according to a survey by LocalCircles, a community-focussed social-media venture, which gathered data from 4,500 start ups and SME entrepreneurs.

The survey pointed out that 34 per cent of the businesses have seen reduced transaction flow due to the government’s demonetisation move. In comparison, only 13 per cent saw an increase in transaction and 33 per cent did not see any transactions.

Around 31 per cent of the respondents said fund-raising for expansion will slow down, compared with 21 per cent who expect the government’s move to result in increased fund flows. Around 20 per cent said the question was not applicable to them as they do not have plans for fund-raise or expansion.

Round 86 per cent of the respondents see the demonetisation having positive impact in the long term. Of this, almost half of them, 44 per cent, see it having a positive impact in the short and long term.

Around 42 per cent said it will be negative in the short term and positive in the long term. Further, 13 per cent see this development to be a negative — both in the short and long term; while only 1 per cent said it was a positive in the short term but negative in the long term.

The survey also pointed out that though some of the customers were paying bills using old currency notes, overall, more start-ups and businesses are experiencing their receivables slowing.

About 28 per cent of them said receivables had gotten worse, 33 per cent experienced no impact, 14 per cent said receivables got better and 25 per cent did not have any receivables issues.

Source: Hindu Business Line