The World MSME Day Celebrates the Resilience of Small Business Entrepreneurs GloballyEvery year, June 27th is celebrated as the World MSME Day and this year's theme is on 'Resilience and Rebuilding: MSMEs for Sustainable Development'. Established by the United Nations (UN), the World MSME Day acknowledges the enormous contributions of small businesses in every country towards fostering innovation, giving to their nation's economic growth and creating millions of jobs in local economies.
The micro, small, medium enterprise (MSME) sector, also commonly referred to as the Small and Medium Enterprise (SME) sector, represents about 90% of all businesses and more than 50% of employment worldwide, according to the World Bank. In emerging economies, SMEs create 7 out of 10 formal jobs. By 2030, 600 million jobs need to be created for the global workforce and MSMEs undoubtedly will be at the forefront for this.
For its immense economic contributions, MSMEs are considered a high priority development sector globally. It is for this reason that the World MSME day was established 5 years ago and aims to shine a light on the vast potential, and the vast challenges, faced by SMEs globally.
India, particularly, is a fascinating country when it comes to the MSME sector. India is today the world's fastest growing major economy with the world's second-largest MSME network. With over 60 million MSMEs in India that provide livelihood employment to more than 120 million people, India's burgeoning MSME sector is growing at a fast pace. This sector accounts for nearly 50% of India's total exports and approximately 30% of its GDP.
Optimisation Through Tech and Digital Solutions
The Reserve Bank of India (RBI) and National Payments Corporation of India (NPCI) collectively have launched various programmes that offer a vast number of digital benefits to MSMEs operating in semi-urban and rural areas in India. To boost sustainable development and help small businesses recover post the COVID-19 pandemic, there is an increased focus on educating and helping small business entrepreneurs integrate technological and digital solutions. These initiatives include using digital payments, e-invoicing, GST filing portals and access to digital MSME loan apps and websites.
The Government of India has initiated a series of schemes, subsidies and tax rebates to enable the Indian MSME sector to become more self-reliant and mitigate supply chain disruptions by adopting and integrating technological solutions. For example, the Government of India launched the Raising and Accelerating MSME Performance (RAMP) programme which will be rolled out with an INR 6,000 crores outlay spread over 5 years to help MSMEs revive their operations after the pandemic. This scheme will help small businesses adopt technological innovations and digital solutions to ramp up production capacity and provide access to formal credit from various financial institutions in the country.
MSMEs should digitise their operations and processes and upgrade their technology to meet dynamic customer requirements to gain competitive advantage in the market. The digital era has provided a huge platform to sell or buy goods and services and MSMEs can establish a new type of an ecosystem via digital means.
By adopting technology and digital solutions, small business entrepreneurs can further accelerate their growth and thereby, the growth of the national economy.
Celebrating MSMEs - https://youtu.be/zrHclK5YBPw
New Digital Lending Solution for MSMEs in India
One of the major challenges faced by MSMEs in India is access to formal credit. Despite its importance and impact, global and Indian MSMEs struggle to grow their business primarily due to lack of access to formal lending options. Nearly 40% of MSME lending in India is from informal channels where the borrowers are subjected to high interest rates and very little consumer protection.
In recent years, some fintechs have broken this mold and have been able to provide support to this underserved market. Favourable Government regulations, robust schemes and initiatives, and accelerated lending through fintechs or last-mile NBFCs and banks are projected to help the MSME sector rebound with a 15% to 17% revenue growth by the end of 2022. With the advent of digitalisation and influx of digital lending companies, it is expected that digital lending for MSMEs will increase by 15 times by 2023.
Around 80% of the small businesses in India face issues while availing funding from traditional lending institutions. To add to this stress, KYC and documentation for availing business loans through banks is usually a long drawn process, factoring in the regulatory requirements. In the last 5 years, the influx of private lenders and NBFCs have changed the digital lending scenarios drastically.
The emergence of last-mile lending fintech companies such as Kinara Capital is bridging the credit gap and offering hassle-free business loans without any property collateral. With omnichannel customer support given via its myKinara App and doorstep customer service, Kinara Capital is accelerating the growth of small business owners in India by providing them fast access to collateral-free business loans for their working capital or machinery purchase needs.
Kinara Capital has disbursed over INR 3000 crores across 70,000+ loans to over 45,000 customers in 90+ urban, semi-urban and rural locations in India. The social impact of the company's financial inclusion work has led to an incremental income generation of INR 700 crores for MSME entrepreneurs, and led to more than 250,000 jobs created or sustained in the manufacturing, services, and trading sector.
This World MSME day, Kinara Capital celebrates the resilient spirit of small business entrepreneurs that endured and recovered from the pandemic, and modeled sustainable development for their countries and for the world. MSMEs in India hold the key to accelerated economic growth in the years to come.
Read more about Kinara Capital now - https://www.kinaracapital.com/
About Kinara Capital
Kinara Capital is a fast-growing fintech propelling financial inclusion of small business owners in India. Led by a women-majority management team, Kinara Capital is globally recognized for its innovations in MSME financial inclusion. Headquartered in Bengaluru, Kinara Capital operates 125 branches across 90+ cities in India. Visit us at www.kinaracapital.com for more information and follow us on Twitter @KinaraCapital
50, Second Floor, 100 Feet Road, HAL II Stage, Indiranagar, Bengaluru, Karnataka 560038
Contact Name: Sayantoni Das for Kinara Capital
Reach us at: firstname.lastname@example.org
Call us at: 9989334826
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