Financial Technology

Redefining business growth for Indian MSMEs with a hybrid model

By Anil Bhardwaj

Technology for MSMEs: Micro, Small, and Medium Enterprises (MSMEs) are widely known to be the backbone of the Indian economy. With over 6.3 crore MSMEs in India that have a direct hand in contributing over 30 per cent towards the country’s GDP, as well as generating 11 crore jobs, MSMEs remain one of the fastest growing and arguably the most important pillar of the Indian economy. The government, too, is trying to create a holistic and conducive eco-system that can enable MSMEs to grow further in 2023.

MSMEs symbolize Atmanirbharta in every sense of the word. By driving organic and sustained growth, they not only encourage local entrepreneurship, but have also been critical amid Covid, helping the economy to be more self-reliant and robust during extremely challenging times.

Also Read: MSME ministry: No information on whether GST badly affected MSMEs

Adoption of technology and innovative business models has always been the gradual next step towards progress for MSMEs. In 2022, we witnessed numerous companies adopt the hybrid model wherein many entities were able to possess an omni channel presence across both offline and online mediums. This not only helped MSMEs to pivot their businesses and adapt to the consumers’ growing preferences and inclination towards online buying, but also enabled them to enhance transparency and consumer trust in the process. Online presence further supplemented their brand credibility as they were able to provide more niche services as compared to other offline retailers. Capacity building towards innovative models remain a key aspect in ensuring sustained growth as this opens the pan India market for MSMEs and does not just confine them to their local cities or states.

Technology has always been viewed as an enabler, and for MSMEs, who have had a great contribution towards socio-economic development, are benefitting greatly from it. In 2023, we expect this momentum to continue with many companies projected to adopt the digital model amidst the Government’s Digital India mission. This will help many companies to strengthen their brand and businesses and help local economies to prosper.

Relatively nascent sectors like E-commerce were able to provide an ideal starting platform for this transition for many companies across India. By gaining access to a wider market, without spending any capital on infrastructure development and the necessary capacity building, MSMEs have been able to leverage their brand and its services on leading platforms. Players like Amazon and others have been instrumental in uplifting MSMEs and the Government needs to scale this approach. A win-win for both, consumers, too, were given more options to choose from and have been mutually benefitting from this new yet fast-growing trend.

Going digital has also enhanced Ease of Doing Business for the organizations, helping them in their operations, addressing customer grievances and pivoting strategies basis the real time feedback that they receive. It has enabled MSMEs to evolve beyond their current capacities, generating further employment and boosting lifestyles across not just Tier 1 cities but Tier II, III regions as well – empowering rural economies as a consequence.  

Also Read: YSR Congress party leader Vijayasai Reddy urges govt to double the time limit for credit repayment from 90 days to 180 days for MSMEs

There is still much to ponder, with 2023 expected to bring in more new challenges and hurdles. The Government needs to be aligned with most needs of MSMEs and provide a sound foundation for sustained growth, handholding them with adequate policies and a robust framework that empowers them. It’s time for the Government to listen to actual MSMEs and not the vested voices that is trying to create a wedge between online and offline sellers.

With widespread acknowledgement that MSMEs will lead the next economic charge in India, the country’s $5 Trillion economy target rests well within the hands of the sector.

Anil Bhardwaj is Secretary General, Federation of Indian Micro Small & Medium Enterprises (FISME). Views Expressed are the author’s own.

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