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BW Businessworld

Understanding Indian MSMEs Future

It is important for everyone in the ecosystem to support MSMEs through technological advancements and policy changes that so they can witness growth, Sharma said

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Union minister of micro, small and medium enterprises (MSME) Narayan Rane on that there is a need to address the issue of delayed payments to micro and small enterprises. 

While chairing the 18th meeting of the National Board of MSME (NBMSME), Rane assured that all the valuable suggestions made by the members during the meeting would be considered appropriately.

In an interview with BW Businessworld, Nitin Sharma, Chief Product and Technology Officer and Managing Director (UpScale), CredAble said currently, around 20 per cent of MSME units are present rurally in India. They also happen to be the most underserved businesses as of today, especially on the credit front. Edited excerpts: 

Tell us about UpScale and how it is empowering micro, small and medium enterprises (MSMEs) in India. 

UpScale offers Indian MSMEs a growth solution by stitching trade, credit and payments together. The last 5 years helped us understand that these three functions are connected and when addressed together, can bring unprecedented growth to any business. For example, if trade facilitation and funds assistance happen offline then the probability of there being structured data around it is almost nil. 

Do you have any plans for MSMEs in rural areas? What are the major opportunities your company provides to rural communities? 

Currently, around 20 per cent of MSME units are present rurally in India. They also happen to be the most underserved businesses as of today, especially on the credit front. When we were working on UpScale, we wanted to bridge this gap without forcing these businesses to spend additional money on infrastructure. We are providing businesses with location-agnostic growth solutions. We do this through our applications that people can easily access.

Can you shed light on consumer buying patterns and habits in the social commerce sector? 

It’s high time businesses acknowledge the importance associated with using social processes as a behavioural tool in the consumer behaviour hierarchy. Rather than merely focusing on short-term promotions via technology, astute businesses are incorporating social media techniques to strengthen their relationships with customers. 

For product marketing and branding, businesses usually focus on three of the most commonly utilised social media platforms: Facebook, YouTube, and Twitter. 

Companies now are understanding the value of using strategies to engage consumers in a way that repeatedly reintroduces the product, boosts the appeal of items or identifies social components to product experiences more than ever before.  

What are the major changes you witnessed in the post-Covid-19 pandemic, as far as businesses are concerned? 

Unfortunately, the MSME sector was severely impacted by the pandemic-induced lockdowns. That being said, the last two years have also witnessed a high adoption rate of digitisation.

Business owners have now understood that more than anything, saving for a rainy day or having an emergency fund is the most important thing for a business. Using available digital tools/solutions like invoicing and payment solutions to reduce operational costs is the next task that they’ve taken up.  

They’re not more equipped when it comes to planning for future credit needs, demand and inventory planning. There is also more focus on having faster collections from buyers and bringing down orders to cash cycles. 

Also, credit criteria of lenders for borrowers have become stricter and kept evolving as per the constantly changing environment, hence it becomes difficult at times for some businesses to find the right lender and lending product match. 

How can SMEs become the main drivers of the country's growth post-Covid-19? 

Digitisation of trade (discovery, invoicing, payments/collections) will be the key.  This will bring in efficiency but this data will also provide newer business opportunities and give insights to remove inefficiencies or manual errors in the system. 

How can Indian MSMEs contribute to India's development nation journey by 2047? 

MSMEs are going to become the biggest employment source for India and will contribute nearly 50 per cent of the national gross domestic product (GDP) (it contributed 30 per cent in FY20-21). Therefore, it is important for everyone in the ecosystem to support MSMEs through technological advancements and policy changes so they can witness growth.