INDIATECHONLINE SPECIAL COVERAGE
World MSME Day; India industry voices; Digital trends of MSMEs during lockdown; Amazon Small Business Day; UGro Sanjeevani digital lending platform|
Today, on June 27 2020 we celebrate World SMSE Day, that is Micro, Small and Medium-sized Enterprises Day.
Small businesses, including those run by women and young entrepreneurs, are being hit hardest by the economic fall-out of the pandemic. Unprecedented lockdown measures enacted to contain the spread of the coronavirus have resulted in supply chain disruptions and a massive drop in demand in most sectors.To continue playing their crucial role in creating decent jobs and improving livelihoods, small businesses depend more than ever on an enabling business environment, including support for access to finance, information, and markets.
These enterprises, which generally employ fewer than 250 persons, are the backbone of most economies worldwide and play a key role in developing countries. According to the data provided by the International Council for Small Business (ICSB), formal and informal Micro-, Small and Medium-sized Enterprises (MSMEs) make up over 90% of all firms and account, on average, for 70% of total employment and 50% of GDP.
That is why the UN General Assembly declared June 27 as Micro-, Small and Medium-sized Enterprises Day, to raise public awareness of their contribution to sustainable development and the global economy.
Kishan Jain, Director at Goldmedal Electricals: “India’s MSME sector has been recognized as the engine of economic growth and for promoting equitable development. The labour strength of the MSME sector is far higher than that of the large enterprises in India. Micro, small and medium-sized enterprises play a crucial role in providing employment opportunities at comparatively lower capital cost than large industries. Also, these firms aid in industrialization of rural & backward areas, thereby, reducing regional imbalances, pledging more rightful distribution of national income and wealth. MSME companies are bringing in path breaking innovations that contribute towards economic development of the country. The government in May 2020 announced a slew of measures such as an INR 50,000 crore equity infusion, an INR 20,000 crore subordinate debt for stressed MSMEs and an upward revision of the turnover limit to provide fuel for growth to the MSME sector. Companies such as Goldmedal Electricals are taking benefit of this and getting back on our feet to restart our business operations smoothly and contribute towards a positive progress of the economy. As we observe MSME Day on 27th June, we need to recognize the contribution made by this sector towards the country’s development while continuing to provide them ample opportunities for further growth and expansion.”
Parag Naik, Co-Founder & CEO, Saankhya Labs: “As a sector that accounts for two thirds of the job opportunities in the country, it is safe to say that Micro, small and medium-sized enterprises (MSMEs) are the backbone of our nation’s economic structure. Over the last five decades, the sector has earned its place for being highly dynamic, vibrant, and a significant contributor to the Indian Economy in terms of Gross Domestic Product (GDP), by placing India on a global map by way of exports. When the pandemic struck, MSMEs were among the worst affected, however, for the country to bounce back to normalcy, it was imperative for the Government to step in. With an aim to handhold the MSME sector, they announced a slew of measures in May 2020, which included providing relief through emergency working capital, the creation of a dedicated fund with an INR 10,000-crore corpus, among other initiatives. This is a welcome move by the Government of India, and will definitely provide a much needed booster shot to the sector. The government can also do more to build the indigenous MSME ecosystem by focusing on supporting R&D and innovation and in addition to manufacturing. For companies like ours, this will go a long way in aiding us as we continue to develop innovative and technology-driven solutions locally which can be exported globally, and in line with the Government’s Atmanirbhar Bharat plan. As we observe MSME day this year, we should use its essence to provide opportunities for the sector to grow, flourish, and bring India back on its high-growth trajectory.”
Shrikant Navelkar, Director, Oracle Relationships, at CloveInfotech: “MSMEs are the growth accelerators of the Indian economy. As per a recent study, the MSME sector provides employment to over 114 million people and contributes to more than 30% of the country’s GDP. However, this sector has been adversely impacted due to COVID-19 and the new normal. It is important for MSMEs to function seamlessly even in such situations. By leveraging the potential of cloud and new-age technologies, MSMEs can accelerate business development, manage operations effortlessly and engage customers better. In the process, they can drive growth and profitability while ensuring highest levels of security and cost-efficiency. On the occasion of MSME day, I would urge all MSMEs to harness the power of new-age technologies and make technology an integral part of their growth charter, if they haven’t done it already.”|
Ashwin Kumar, Director - Data Centre and Cloud Operations, Linode India: “On this MSME day, we honour the crucial role small businesses and enterprises serve by creating jobs and improving livelihoods. This vital segment of the economy - in India and around the world - faces unprecedented challenges ensuring technological and financial continuity. For many, that means an accelerated and rapid shift to the cloud. Our mission since the day we were founded, has been to make the cloud simple, affordable and accessible to everyone. Delivering on that mission has never been more important.”
Manish Dalal, SVP & General Manager, Endurance Group – APAC: “COVID-19 has forced everyone to rethink daily life. In response to the lockdown, MSMEs who could embrace digital presence were able to keep some semblance of normalcy and continue to serve or engage with their customers. This crisis has made it imperative to digitally transform our places of work. We are fortunate to be able to aid businesses in their digital transformation journey through our products and services.”
Digital trends of MSMEs during the lockdown
The digital transformation by Micro, Small and Medium Enterprises (MSMEs) has traditionally lagged behind the expected growth curve. As per Zinnov Consulting, out of the 75 Million MSMEs based in India, 16-18 Million have a social media presence, an online listing or a website. Out of 5 Million domain names registered in India, only half have a website behind them.
Endurance International Group (“EIG”), the parent company of web presence brands like HostGator, Bluehost, ResellerClub, BigRock undertook a survey with Indian MSMEs to understand their adoption of digital presence in response to challenges during COVID-19.
According to the survey, approximately 30 percent of MSMEs started a business website or enabled e-commerce functionality since the lockdown started owing to the COVID-19 pandemic. More than 50 percent of MSMEs surveyed / embraced video conferencing tools and WhatsApp to keep business running during these turbulent times.
Preference for using digital is now approximately ~1.9X more than traditional sales interactions. MSMEs in the educational services segment recorded the highest jump in the importance of using digital mediums.
With lockdown measures in place, the MSMEs who were able to offer e-commerce functionality witnessed revenue contribution from e-commerce increasing to approximately 50 percent of their total revenues. For MSMEs in retail and educational services, increase in revenue contribution from e-commerce was 53 percent and 65 percent respectively.
The negative impact of COVID-19 on MSMEs has been intense with many having to pause or entirely shut their business. In this survey, one third of MSME respondents confirmed that they are temporarily shutting their business until normalcy resumes. This pause in business is more prominent among MSMEs in metros cities and those in the retail and manufacturing verticals. Majority of MSMEs (nearly 60 percent of those surveyed) believe that it will take up to 6 months for business to return to normal.
Amazon Small Business Day
Amazon will host the third edition of its sale event - Small Business Day (SBD) 2020 on June 27 on the occasion of the Micro-, Small and Medium-sized Enterprises (MSME) Day. This specially curated annual online ‘sale event’ will help small businesses, artisans, weavers and micro-entrepreneurs and start-ups to rebound from economic disruption created by COVID-19.
Small Business Day on 27 June 2020 will offer customers the opportunity to discover and purchase unique and hard-to-find products from start-ups, women entrepreneurs, artisans and weavers under its various programs such as Local Shops, Amazon Launchpad, Amazon Saheli, and Amazon Karigar as well as enjoy deals and offers extended by lakhs of small businesses. Products across hundreds of categories including work from home essentials; regional weaves in fashion; handcrafted accessories and footwear; wall décor & hangings; idols & figurines; kitchenware; sports essentials will be available on several theme stores like ‘India Bazaar’, ‘Budget Buys’ and ‘Bestsellers’ among many more
U GRO Capital aims to reach 500,000 MSMEs with Sanjeevani digital lending platform|
U GRO Capital, a technology first, small business lending platform has announced the launch of ‘Sanjeevani’, an end to end digital lending platform to boost the capital starved MSME sector in India, reeling from the aftermath of Covid-19. The company is committed to reaching out to 500,000 MSME clients.
The company has built a deep digital architecture that is empowered by video-based KYC, Personal Discussions and algorithm-driven predictive risk tools to launch an industry-first, program that will accelerate instant loans, (both secured and unsecured), up to INR 2 crore so that businesses can be re-started and the economy can recover from a three-month hiatus. To be launched on July 1, the program also offers an in-built, upfront, moratorium up to three-months to aid businesses whose working capital cycles have been disrupted either by supply chain breakages, labour issues or adverse cash flows during the Covid-19 induced national lockdown.
‘Sanjeevani’ will ease the borrowing experience and quicken the loan disbursal process, of MSMEs particularly in a Covid-19 environment where physical verification comes with its own set of challenges. The entire process, from filling the application form, sharing documents and getting disbursal of the loan can be completed from your workplace within 3 – 5 business days depending on the availability of the relevant documents with the applicant. This is by far an improvement as compared to weeks taken earlier for disbursals in this segment.