MSMEs Seek Professional Guidance and Financial Support to Grow Their Businesses
Key Highlights :
The Indian MSME sector is the backbone of the economy, with over 63 million MSMEs contributing to over 28% of the country’s GDP. To better understand the needs of India’s small business entrepreneurs, Kinara Capital recently conducted an MSME Sentiment Survey that has unveiled the top priorities of India’s small business entrepreneurs. The survey was conducted with input from 2,600 formal MSMEs that are Udyam-registered, and represent a range of businesses across manufacturing, trading, and services sectors in Karnataka, Gujarat, Maharashtra, Andhra Pradesh, Telangana, Tamil Nadu and UT Puducherry.
The survey demonstrates that MSMEs are eager to scale their businesses and are looking for comprehensive and innovative services to fast-track their growth. There were 3 main findings from the survey on the themes of Instant Financing, Supply Chain, and Business Services.
Business Support Services emerged as a critical area where MSMEs seek expert guidance on services such as ‘Business Accounting, Tax Filings, GST Calculation & Filing Support’. MSMEs struggle to keep up with quarterly GST and income tax filings on-time due to lack of understanding of the requirements. 30% of surveyed MSMEs asked for Business Accounting and GST Filing Support as their top Non-Financial Services request. Specifically, MSMEs listed Business Accounting Services and GST Tax Calculation and GST Filing Support with a share of 17% and 13%, respectively.
21% of MSMEs want to enhance their digital presence via Website Creation, Digital Platform Listings and Onboarding on Online Trading Platforms. About 15% of MSMEs selected Website Creation and Digital Platform Visibility as their top priority and 6% want support to be listed on MSME Trading portals such as TReDS and GeM. Above all, the Services sector ranked Website Creation and Digital Platform Visibility at 27%, making it their topmost Non-Financial Services requirement.
Personal Finance Support is also a key area where MSMEs are seeking guidance, with 9% of MSMEs specifically seeking guidance with Insurance and Investments. This is indicative of many MSMEs reporting a 20% increase on average in their incremental income generation after being able to access formal credit to grow their business.
Instant Financing is the topmost requirement of MSMEs in the financial services category, and Industry Networking tops the chart in the non-financial services category. Lack of easy access or non-availability of short-term credit are the biggest hindrances faced by MSMEs, with over 38% of the MSMEs attributing this as the main impediment to their growth. 1-out-of-2 surveyed MSMEs want Instant Line of Credit to accelerate everyday business decisions. The survey added that over half (55%) of the surveyed MSMEs chose Instant Line of Credit as their top financial product choice for their businesses, with about 8% of MSMEs specifically asking for a Bill Discounting product.
One-fourth of MSMEs say Industry Networking with their Supply Chain Ecosystem is critical for their growth. MSMEs identified vulnerabilities with physical supply chain and difficulty finding relevant buyers and sellers, especially since less than 5% India’s supply chain is digitised according to industry experts. Micro-MSMEs particularly struggle with freight logistics and costs for local goods transport. MSMEs are increasingly searching for comprehensive assistance to grow their business. Close to a quarter (24%) of the respondents would like help with Industry Networking, especially with their supply chain ecosystem to improve access to buyers and sellers and many indicated openness to pay for the service.
MSMEs are looking for comprehensive and innovative services to fast-track their growth. They are seeking trustworthy professional guidance and tax filing support from accounting and tax experts. They also require Instant Line of Credit and Flexible Repayment Product to accelerate everyday business decisions and make variable loan payments based on their business turnover. In addition, they need Industry Networking to improve access to buyers and sellers and dedicated 4-wheeler and 2-wheeler commercial vehicles to address the inability to supply finished products or raw materials on-time to customers.
Overall, the survey highlights the need for professional guidance and financial support to help MSMEs grow their businesses and meet their goals.
