Digital MSME to Promote Digital Adoption & Digital Literacy in Small Businesses

December 11, 2023
Updated on

Modern India is rapidly becoming digitised, and almost all businesses are embracing digital technologies. Following the need, many MSMEs in India have also realised the value of digitisation and technological adoption to stay competitive. Although the small company sector was slowly adopting digital technologies, the COVID-19 pandemic has accelerated this tendency. Hence, making a place for digital change in their overall business strategy was their only option for survival.

Importance of Digital MSME in Transforming MSME businesses

The Government of India has introduced a scheme called Digital MSME for empowering MSMEs digitally. The scheme aims to increase the awareness and adoption of information and communication technology (ICT) in the MSME industry by having those businesses and production processes use ICT tools in their business. It aims at promoting awareness of e-platforms and encouraging digital marketing in MSME industries.

How is Digital MSME Beneficial for MSME Entrepreneurs?

Small business owners who digitally altered their operations reported significant cost savings. They also strengthened their position in comparison to the competition on the market. Additionally, by exposing MSMEs’ products and services to a larger market, digital solutions helped them increase sales.

How to Apply to Digital MSME?

MSMEs with Udyam Registration can get in touch with MSME Development Institutes, Technology Centres, Testing Centres, the Central Government, the State Government, and its organisations.

What Major Barriers Prevent MSMEs from Undergoing Digital Transformation?

  • Not having sufficient funds to expand the business.
  • MSMEs are averse to implementing digital technologies because they lack the funding to maintain their business units with a talented staff that is up to date on the latest platforms and technology.
  • Minimal understanding of topics like data, the cloud, system management, etc. that require extensive training.
  • Many small business owners are still ignorant of the impact of digital technology, which prevents them from gaining new customers and retaining the existing ones.

Grow your MSME with collateral-free business loans

How can we Promote the Adoption of Digital Technology among Indian MSMEs?

1. Greater Capital Investment is Required

The current investment level in launching a digital revolution is inadequate when compared to the demands. As a result, MSMEs with inadequate technological infrastructure would end up with subpar products. MSMEs in India must embrace digital solutions that save operational costs and improve customer retention if they want to extend the benefits of digital technology. Hence, every value-driven digital investment will certainly generate proportional returns. 

Small business owners can apply for the Digital MSME scheme, or there are several last-mile lending NBFCs that offer collateral-free business loans to small business entrepreneurs. They can apply for one of those MSME loans and expand their company with new technologies.

2. Increasing Digital Literacy to Use Modern Technology

The number of employees with advanced digital product expertise is severely lacking for Indian MSMEs. Finding the right employees from talent pools is the only way to reach the high pedestal that includes data analytics, automation, cloud computing, data mining, etc. The Government has developed curricula and courses to educate small business owners digitally through the Digital MSME scheme. 

3. Reduce Reluctance to use Digital Solutions

The majority of MSMEs in India are hesitant to accept technology-driven products since these solutions seem foreign to them. Long-term, their general profitability is negatively impacted by their hesitation and lack of understanding of the value of digitisation. Educating small business entrepreneurs on how digitisation and the adoption of new technologies benefit them through councils, trade bodies, and industry groups is one useful alternative. It helps MSMEs to get a greater grasp of technology and the benefits of the digital transformation.

4. Support Constant Innovation and Improvement

Indian MSMEs require specialised solutions to meet their specific operational needs. Adoption of new technologies and innovation should therefore go hand in hand. Better alternatives will emerge through innovation of current solutions. To support innovation in the digital space, a robust structure of collaboration between technological institutions and MSME clusters is necessary. Additionally, for a smooth digital transformation, Indian MSMEs need to employ more publicly available channels like social media. Such digital solutions need little financial investment and produce outstanding results in the form of sales leads and trust-building.

5. Using Cyber Security to Lessen Data Theft and Online Fraud

The susceptibility to cyber dangers will increase as Indian MSMEs start their journey with digital solutions for purchasing, paying, handling, and managing inventories. MSME entrepreneurs may not be well-equipped to track and protect their information systems from such attacks. As a result, it’s important to raise awareness while also providing affordable cybersecurity choices.


The MSME sector is extremely important. Over the past few years, the MSME sector in India has demonstrated enormous growth potential. The MSME sector can do tremendous things if its growth trajectory is combined with a stronger emphasis on leveraging technology. The Digital MSME scheme and the right use of new technologies have the power to greatly improve small businesses. MSMEs will acquire a competitive advantage over their rivals as they advance along their path of digital technology.

One of the top NBFCs in India, Kinara Capital, helps small business owners by providing the right business loans to technologically digitalise their operations. MSME business owners can apply for fast and flexible MSME loans from Kinara Capital by providing minimal documentation. Download the myKinara app from the Google Play Store to check your company’s eligibility in just 1 minute.

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