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Time For MSMEs To Go Global
Consistent policies supporting MSMEs ranging from skills development, finance availability, debtors protection, infrastructure development, make in India, and Atma Nirbhar India initiatives have catalyzed the readiness of MSMEs
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27th June 2022, this MSME day is unique. It is ensuing at the 'Get Set Go' moment for the Indian MSMEs. Yes, I have all reasons to believe that MSMEs are thoroughly steamed up to go global. A lot has happened in the last decade. Let us look at them minutely.
The most significant external force putting MSMEs in the league of "Going Global Soon-ers" is the Government of India. Consistent policies supporting MSMEs ranging from skills development, finance availability, debtors protection, infrastructure development, make in India, and Atma Nirbhar India initiatives have catalyzed the readiness of MSMEs.
Significant Foreign Direct Investment in the last decade has brought global industries to India. These MNCs have boosted MSMEs' prospects through their vendor development programs. It has given a blanket exposure to MSMEs about global markets, quality management, technology adoption, and of course, the connections. It has made MSMEs confident and ambitious to expand to new markets.
In the last decade until five years ago, MSMEs were considered lazy on IT adoption. For them, accounting software was the IT, and IT was the accounting software. Not the time has changed. In the last two years, the IT industry has witnessed significant investment in software, hardware, and services by the MSME sector. It indicates that MSMEs have realized the value IT can add to their business and enhance their competitiveness. In reciprocation, the IT industry has invested in developing the products, solutions, and services that are MSME-oriented. Now we see products like IT in a Box, DLP for MSMEs, cost-effective remote access solutions, and MSME-specific cybersecurity products. We see the SaaS (Software as a Service) as offering the solutions that make technology affordable for MSMEs. Such development triggers immense confidence among MSMEs in the competitive global diaspora.
Covid crisis has changed the world. The role and influence of China in global trade and supply chain have prompted the rest of the world to establish a balance. Ukraine war has pushed the rest of the world to adopt a "My Nation First" foreign policy with one another. Somehow, the world finds its comfort zone in dealing with democracy compared to pseudo-democracy. India, a democracy with all its demographic features, tops the list of the countries to look upto to restore trade and supply chain balance, as seen by the affluent western world. It is a strong reason for MSMEs to go global and sail with the wind.
With the success of SME Stock Exchanges, equity funds are accessible to MSMEs. In a recent valuation meltdown in the Start-Up ecosystem, the equity flow from Angel to VC to PE is more rationalised. It will make Private Equity Funds broaden their shopping list from VC-invested companies to MSMEs with solid profitability and a robust business model. The ongoing fintech revolution is likely to fund MSMEs when they need funds. It is adding a new angle to lending. We see a clear shift from collateral-based lending to operations-based lending. There are fintech companies that can integrate with MSME's operations cycle and fund them based on business opportunities.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.