Micro, Small, and Medium Enterprises (MSMEs) are often overlooked in India. With more than 63 million businesses, the MSME sector contributes around 30% of India’s GDP, making them a vital engine for growth. The sector plays a critical role in propelling the nation towards its ambitious goal of becoming a $5 trillion economy by 2025.
Despite the unprecedented challenges during the COVID-19 pandemic, MSMEs have demonstrated impressive resilience. The sector is now poised to accelerate its growth trajectory. As the nation’s growth accelerator, the MSME sector in India has shown remarkable agility in adapting to changing market conditions.
With their undaunted entrepreneurial spirit and impressive track record, MSMEs play a pivotal role in transforming India’s economy. MSMEs are also resourceful and adapt to changing market conditions even in tough economic times. They emerge as key drivers of innovation and progress and achieve bold aspirations for the future.
The MSME sector in India has demonstrated remarkable agility and innovation in adopting new technologies, particularly the rapid adoption of smartphones. The widespread usage of smartphones has been a transformative change for the sector, allowing businesses to operate, transact and access vital information on the go. Digital transformation was already in process in India but was significantly accelerated by the pandemic.
During the Covid-19 lockdowns, people had less interaction with each other and hence, digital modes of transaction emerged as a crucial tool for them to remain competitive in the uncertain period. Many businesses were even able to pivot entirely, leveraging the vast resources and information available on the internet through their smartphones. This behavioural shift toward smartphone adoption protected the MSME sector in India from financial ruin and empowered them to drive growth, increase efficiency and explore new business models.
Mobile technology has ushered in a new era of possibilities for businesses, becoming crucial for their survival and growth in the modern competitive landscape. Once limited to a specific location, businesses can now expand their reach and attract more customers through smartphones and the Internet. The adoption of mobile devices has enhanced efficiency and flexibility, empowering the MSME sector in India to respond swiftly to new opportunities and adapt to changing market conditions.
With mobile technology, MSMEs have become more efficient, accelerated their growth, and improved customer engagement while enhancing employee experiences. The shift towards digital channels has revolutionised communication, marketing, payments, hiring, and other critical aspects of modern business, allowing companies to thrive in the new digital age.
In the current business landscape, smartphones have emerged as a game-changer for the MSME sector. It empowers them to become more efficient, productive, and competitive. The benefits of using smartphones are diverse and impactful for MSMEs, some of which include:
Smartphones have emerged as a powerful tool for MSMEs to improve their efficiency and productivity without compromising on quality. By leveraging the capabilities of smartphones, businesses can complete tasks quickly and efficiently, which were previously time-consuming and resource-intensive. Smartphones offer a range of features and tools that can help MSMEs to streamline their operations and increase productivity. For instance, mobile apps can automate tasks like ordering, inventory management, and shipment tracking, reducing the need for manual labour and improving overall efficiency.
Apps for inventory and accounting management can help MSMEs smooth-sail their operations and stay on top of their finances. It allows businesses to easily manage their inventory, track sales and expenses, and generate invoices on the go. With real-time updates and analytics, MSMEs can make informed decisions and improve their bottom line. The convenience and accessibility of these apps make them valuable tools for MSMEs looking to grow their business.
Smartphones have transformed the way MSMEs communicate. With the ability to communicate instantly and easily, regardless of location or time zone, smartphones have become an essential tool for businesses to stay connected with their customers, vendors, and other stakeholders. One of the most significant advantages of smartphones is their ability to facilitate communication between businesses and customers.
Mobile apps like WhatsApp, Instagram, etc. enable businesses to communicate with their customers, provide them with information about their products or services, and get their feedback in real-time. MSME sector can use these free and useful channels for advertising their products, communicating with customers about offers and new products, etc. This helps businesses to build stronger relationships with their customers and stay ahead of their competition. Smartphones also allow businesses to access customer data and insights, which they can use to improve their products or services and enhance customer experience.
Smartphones have revolutionised how the MSME sector in India conducts business by providing unparalleled flexibility and mobility. Uninterrupted smartphone connectivity is crucial for them to become accessible and stay connected with their customers and suppliers. With the widespread accessibility of mobile data and Wi-Fi, MSMEs can conduct business from anywhere at any time. This allows for greater flexibility and efficiency in managing orders, inventory, and customer relationships. By having constant access to communication channels, they can maintain their competitive edge and meet the demands of today’s fast-paced business world.
With smartphones, MSMEs can also use cloud-based technology to store data, collaborate with team members, and access real-time information, giving them a competitive edge. Smartphones also offer a range of applications and services that can help businesses operate well at reduced costs. By using smartphones, MSMEs can work smarter, not harder, and stay ahead of the curve in their respective industries.
The MSME sector in India is increasingly using digital technology to conduct secure financial transactions using smartphones. With the increasing availability and affordability of mobile technology and the growth of e-commerce, smartphones have become an efficient and cost-effective method for MSMEs to carry out their financial transactions. By adopting digital payment platforms such as mobile wallets, QR codes, and other secure digital transaction methods, MSMEs can reduce their dependence on cash transactions, which can be risky and time-consuming.
Digital transactions have revolutionised how MSMEs operate, offering them enhanced security and unparalleled convenience. During challenging times like the pandemic and demonetisation, smartphones played a pivotal role in ensuring that MSMEs did not have to halt their transactions. Despite the adversities, MSMEs managed to weather the storm by embracing digital transactions. Furthermore, the adoption of digital payment methods has empowered these businesses with transparency and accessibility in their financial transactions, enabling them to track and maintain records of their financial activities effortlessly.
This newfound transparency has facilitated informed financial decision-making and helped MSMEs easily fulfil their compliance requirements. Overall, digital transactions have emerged as a vital tool for MSMEs, empowering them to streamline their operations and focus on their core business activities.
Smartphones have become a crucial tool for MSMEs as they provide access to a wealth of information and resources. Market data, industry trends, and customer insights are necessary for businesses to make informed business decisions. The quick and easy access to new ideas and information allows businesses to collaborate more effectively and increase their customer base.
Furthermore, smartphones help businesses access information quickly and efficiently. With a smartphone, businesses can access real-time data and analytics on their customers, products, and services. Ultimately, using smartphones can help MSMEs improve their operations, become more efficient and productive, and increase their chances of long-term success.
The MSME sector in India benefits from the convenience of using smartphones for documentation purposes. With the help of document scanning and management apps, they can manage and organise their paperwork more efficiently. Digitisation of receipts, invoices, and contracts using these apps helps them to reduce the need for physical storage space and simplifies the auditing process. This results in greater accuracy in record-keeping, faster turnaround times in processing documents, and increased productivity for MSME entrepreneurs.
Digitised documents can be easily stored and retrieved from cloud-based services, making it easier for MSMEs to access their documents remotely from any location. This also means that physical copies of documents are no longer necessary, which can help MSMEs to save on storage costs and reduce the risk of loss or damage to important documents.
Furthermore, the advent of digital transactions has simplified the documentation process for financing, eliminating the need for cumbersome physical paperwork. Financial institutions like Kinara Capital have embraced this digital revolution by offering streamlined financing solutions without physical documentation. This innovation has reduced the administrative burden for MSMEs and accelerated the financing process, allowing businesses to access the funds they need quickly and efficiently. By leveraging digital transactions, the MSME sector can now experience a seamless and hassle-free financing experience, enabling them to focus on their growth and expansion goals.
Smartphones have become essential for the MSMEs looking to expand their businesses and reach new customers. Using mobile apps, businesses can effectively market their products or services, target specific customer demographics, and reach new markets. Social media platforms like WhatsApp, Instagram, Facebook, and Twitter allow businesses to create engaging content and interact with potential customers directly, building stronger relationships and increasing customer loyalty.
Moreover, smartphones can enable businesses to create e-commerce platforms that allow customers to purchase products or services online, further expanding their reach and market share. In short, smartphones offer a powerful way for MSMEs to grow their businesses and stay competitive in the digital age.
The formalisation of the MSME sector in India is the process of registering and bringing informal businesses into the formal economy. It is essential for MSMEs to get access to formal lending, government schemes, MSME schemes, and subsidies, which can be used to invest in new technologies like smartphones, computers, and internet connectivity. It also helped their brand recognition to reach potential organised markets, access to public procurement programmes, and protection against delayed payments by big units.
In India, the unorganised sector comprises a staggering 99.7% of all enterprises. To bring these businesses into the mainstream and promote organised business practices, the Government of India launched the Udyam Portal. The majority of these unorganised firms fall under the “micro” category of the MSME sector, with owner-managed firms operating with fewer than five workers. Through the Udyam Aadhaar Scheme, businesses receive a unique identification number that facilitates access to various schemes and incentives. According to data from the Hindu Businessline, as of March 21, 2023, registrations had surged to over 1.5 crore units, providing employment to approximately 10.84 crore people. Of the total registered businesses, 1.45 crore were micro-enterprises, 4.53 lakh were small, and 40,678 were medium enterprises.
The adoption of smartphones and technology has resulted in a significant increase in the rate of formalisation among the MSME sector in India. Access to credit and finance has empowered MSMEs without the necessary funds to invest in new technologies on their own. In addition, formalisation also brings businesses under the purview of regulations, which often require the use of digital tools like smartphones to maintain proper records and accounts.
As a result of this adoption of smartphones, more MSMEs are increasing their efficiency, productivity, and competitiveness. Smartphones have become essential for businesses to communicate with customers, vendors, and other stakeholders, manage their operations, and access valuable information and resources. The formalisation of MSMEs has created an environment where smartphones are seen as a necessary tool for growth and survival, and this trend is expected to continue in the years ahead.
The MSME sector in India has a promising future with abundant possibilities for leveraging the power of smartphones. India is one of the fastest-growing smartphone markets in the world. Therefore, the synergy between smartphones and the MSME sector in India presents a promising outlook for the future. One of the most significant trends that will shape the future of smartphones and the MSME sector in India is the increasing adoption of digital technologies.
India is undergoing a digital transformation, and the MSME sector in India is not an exception. With the proliferation of smartphones and the internet, MSMEs are adopting digital technologies such as cloud computing, mobile applications, and digital payments to streamline their operations. One of the key factors that will fuel the adoption of digital technologies in the MSME sector in India is the need for greater efficiency and competitiveness. They face significant challenges, such as high costs, limited resources, and intense competition. Therefore, digital technologies can help them to reduce costs, improve productivity, and enhance customer experience.
PayPal’s MSME Digital Readiness survey in December 2022 revealed that the MSME sector in India is eager to invest in more digital payment options due to consumers’ growing acceptance of various payment modes. The survey also revealed that 95% of MSMEs are exploring new payment options, and 89% are looking to optimise card payments. Over half of the MSMEs witnessed a positive impact on their businesses online as the economy began to recover from Covid-19 lockdowns.
Although the pandemic significantly impacted the MSME sector, it accelerated the pace of digitisation. The survey was conducted among 250 business decision-makers of MSMEs. Nearly 30% of MSMEs found that the business environment in India became more favourable for online sales, while for 31%, the cross-border opportunity appeared promising. To enhance their customers’ payment experience, 49% of MSMEs expressed a keen interest in developing their own website and app.
The survey also showed that 66% of MSMEs are leveraging various online selling channels, followed by the marketplace (62%), company-owned platforms (i.e. apps) (61%), own e-commerce website (54%), and third-party e-commerce platforms (54%). With increasing digitisation and the adoption of new payment technologies, MSMEs are well-positioned to leverage emerging opportunities in India’s rapidly evolving digital landscape.
Another significant trend that will shape the future of smartphones and the MSME sector in India is the rise of e-commerce. The Covid-19 pandemic has accelerated the growth of e-commerce in India, and this trend is continuing. The MSME sector in India is leveraging e-commerce platforms like IndiaMART to expand its customer base and increase sales.
The government of India has also launched several initiatives to promote the growth of the MSME sector in India. For instance, the government’s Digital India program aims to provide digital infrastructure and services to every citizen, including MSMEs. Additionally, the government has launched the Atmanirbhar Bharat Abhiyan (Self-Reliant India Mission) to reduce reliance on foreign-manufactured devices and components, leading to decreased dependency and greater accessibility and adoption of domestically produced alternatives.
Smartphones are essential tools for the MSME sector in India to stay competitive and increase productivity. However, the adoption of mobile apps has provided them with opportunities to improve business efficiency and decision-making. Mobile apps can help MSMEs increase market penetration, higher sales, enhance cooperation with customers and suppliers, improve the image of the company, speedy operation, and better productivity of workers. Smartphones have helped MSMEs transcend geographical barriers, increase productivity, and personalise connections with customers. Using digital collaboration tools, MSMEs can reconnect with the business environment for ease of business.
With the right mobile apps and digital tools, the MSME sector in India can streamline operations, reduce costs, and save time. The future of smartphones and the MSME sector in India is full of potential. As MSMEs adopt digital technologies, they become more efficient, competitive, and resilient. Moreover, with the government’s support and the rise of e-commerce, the MSME sector in India can expand its reach and contribute to India’s economic growth.
Non-Banking Financial Companies (NBFCs) play a critical role in helping MSMEs to become digital using smartphones in India. NBFCs offer various financial products and services that enable MSMEs to invest in digital infrastructure such as smartphones, computers, and internet connectivity. This allows MSMEs to adopt digital technologies and improve their operations, including digital payments, inventory management, and customer engagement.
NBFCs provide working capital loans, which help MSMEs to purchase digital equipment, hire skilled personnel, and expand their business. With the support of NBFCs like Kinara Capital, the MSME sector in India can embrace digital technologies, become more competitive, and contribute to the country’s economic growth. With Kinara, accessing all services becomes incredibly convenient, as they are just a few taps away on your smartphone.
Kinara Capital is a leading last-mile lending firm in India committed to positively impacting the world’s fastest-growing economy. Through its innovative lending solutions, Kinara promotes financial inclusion in the MSME sector in India, empowering small businesses to achieve their growth potential. Kinara has become a trusted partner for thousands of MSMEs across the country as they ensures to reach even the most remote areas of India.
MSMEs can easily apply for a business loan from Kinara Capital by visiting the company’s official website or using the user-friendly myKinara app. Also, we have a dedicated customer support team available between Monday – Friday (9.30 AM – 6.00 PM) at our toll free number 1800-103-2683 for any questions or assistance. This ensures that entrepreneurs can get the help they need throughout the loan process. With Kinara Capital, MSMEs can access the funding they need to grow their businesses and contribute to India’s economic growth. What are you waiting for? Apply for a business loan from Kinara Capital right now!
