The Real Hero of the Indian Economy, MSME: How to make them strong?

During any Govt. of India conferences, speakers speak onstage about the MSME. We hear people addressing the micro, small and medium enterprises as the real hero of the Indian economy.

"Real Hero," how and why?

What makes the MSME sector so important??

The Micro, Small, and Medium Enterprises are the "Growth Engine" of the Indian economy. They are the major contributor to youth employment and international trade. Indeed, the MSME sector plays the most significant role in making India a self-depending economy.?

According to CII's report, the MSME sector contributes approximately 30% to the Indian GDP. The Service Sector contributes around 6.11%, and the manufacturing industry contributes about 24%. According to PIB India's report, MSME India contributes approximately 48% to the Indian Exports. Although India lags behind China & Germany if we compare the sectorial contribution to the economy, there's a growth of 19% CAGR from 2019 to 2020.?

Then, we entered the era of COVID, and the Indian MSME sector started grappling with the consequences of the post-pandemic effect. It's a fact that bothered everyone and the Indian Government too. We see unanimous efforts and initiatives taken by Government and organizations like VMentor.ai through their Social deliverable handle, SARATHI.ai - Growth accelerator for MSME , Sarathi.

There's one mission and vision behind this drive, to make them strong, but how?

While on the one hand, we see incredible efforts to address MSME pain points by some of the finest organizations like the Wadhwani Foundation . On the other hand, Nikita Bose 's post on Linkedin says that only 1 Crore MSME out of 6.4 Crore registered at Udyam Portal. It's a clear indicator of some awareness gap in the prevailing system. Indeed, it's one of the key concerns affecting MSMEs to grow at an accelerated speed.?

So, what do they need?

How do you make them strong?

First, of course, they need a Growth Sarathi!

Key Updates:

• Growth in MSME loan disbursement in Financial Year 2021 by 40% (SEDBI)
• The highest number of loans disbursed in the Financial Year 2020 is 6.22 crores.

Excellent figures, huh? What else?

Next Up is the MSME Registration (Udyog Aadhar), with dozens of benefits:

• Tax Rebates
• Credit Facilitation of up to 1 Crore
• Participate in Open Government Tenders
• Is that all? No! There's more on the registered MSME bucket list
• The Govt of India is facilitating up to 80% incubation funding for the MSME projects
• MSME grants and Credit Facilities with loans at a subsidized interest
• Availability of Credit-linked capital subsidy scheme for MSME India
• Launch of Women entrepreneurship scheme for MSME business growth
• Availability of Co-lateral free channel financing from many banks?

Vola! Then, what's the struggle when there's so much on the plate??

Deficient awareness and availability of the correct facilitation partner.

However, someone like MSME Sarathi can benefit SME India throughout this Journey. VMentor.ai is building India's first MSME Incubator, SARATHI, to offer help and facilitation services to SMEs and MSMEs.?

Two of our Interns, Muskan Dewangan and Mayuri L. , are doing a Research Project to identify the Key challenges faced by the Indian MSMEs.

They have interviewed over 200+ Small, Medium, and Startup owners and identified these common problems:

• Poor Infrastructure
• Inadequate Hr Policy
• Lack of Innovation
• Financial Constraints to scaling up
• Poor CIBIL score to get funding support from back
• Challenge to register on Government Portal for lack of documentation.
• Improper Working Capital Management
• Lack of Digital Adaptation.?

Now, having discussed the pain areas, what is the need of the hour for MSMEs to make them strong?

• Action to adopt digital channels immediately
• Become a registered MSME and enjoy the Govt. grants and benefits
• Increase digital literacy & skills
• Increase digital presence
• Create a business roadmap?
• Take expert to tell on how to get funding.
• Involve Business Lawyers

Unfortunately, out of 6.4 crore MSMEs, 99% are Micro, and that's the challenge of the accessibility of services.

Few companies call themselves pure MSME consultants offering a one-stop solution for all MSME needs. However, the MSME sarathi vertical of VMentor, under the leadership team of Sanjiv Kumar Tripathy , Dr. Srinivas Chunduru , and Meenu Bhatia , is working on this philosophy with a mission MSME India.?

We are calling all MSME, SME, Startup Owner, and Founders "The Real Hero" of the Indian Economy.

Why don't you Click for a FREE Business Discovery session Now?