SIDBI has launched a report titled ‘Understanding the Indian MSME Sector: Progress, and Challenges’. The report supplies complete insights into the quickly rising MSME sector in India, based mostly on each major and secondary analysis. It consists of trade, gender, and regional-level analyses, drawn from a major survey of greater than 2,000 MSMEs throughout 19 industries. The survey gives a deeper understanding of ground-level tendencies within the MSME sector and highlights the sector’s progress, challenges, and alternatives. Specifically, the report supplies insights into girls entrepreneurship and sustainability initiatives, aligning with the Authorities’s deal with these areas. The examine additionally gives an estimate of the credit score hole within the MSME sector.
The important thing findings of the examine are talked about under:
- Formalization Drive: The MSME sector, particularly micro and small enterprises, has seen vital formalization by way of Udyam Registration and Udyam Help Portal, with over 6.2 crore registrations by March 2025 (up from 2.5 crore in March 2024).
- Entry to Credit score: The survey respondents contemplate well timed and enough credit score entry as one among their key challenges regardless of the great coverage initiatives in that regard. Whereas borrowings from casual sources are minimal for small and medium enterprises at 3% and a couple of% respectively, it’s nonetheless comparatively vital at 12% for micro enterprises.
- Digital Lending Alternative: With 18% of MSMEs utilizing digital lending platforms and 90% accepting digital funds, the sector exhibits promising digital adoption. This pattern, supported by platforms like UPI, can improve credit score entry going ahead.
- Credit score Hole: Elevated credit score provide to MSMEs is in proof. The examine broadly estimates that the sector nonetheless has an addressable credit score hole of about 24% or Rs 30 lakh crore. The hole is larger within the providers sector at 27%; it’s estimated to be additionally larger at 35% for girls owned MSMEs, indicating a necessity for focused coverage actions.
- Girls Entrepreneurship: Girls entrepreneurship has develop into a big side within the MSME sector with 26.2% in proprietary enterprises being owned by girls as per ASUSE 2023-24, signalling rising inclusivity. 76% of the ladies led MSME respondents have entry to credit score, however they proceed to face larger challenges vis-à-vis their male counterparts with 41% highlighting credit score entry and excessive competitors as the biggest impediment to their progress.
- Market Entry Challenges: Based on the survey, a majority of the MSMEs have been gradual to undertake fashionable channels to achieve prospects. Round 70% of the survey respondents proceed to make use of conventional modes of promoting which hinders their scalability and talent to stay aggressive. Efficient utilization of e-commerce and digital advertising and marketing can present MSMEs with improved entry to new markets and prospects.
- Export Potential: MSMEs elevated their merchandise export share from 43.6% (FY23) to 45.7% (FY24). Exporting MSMEs present higher tech adoption than non-exporters, however cite provide chain points, credit score entry, and competitors as main hurdles, although they.
- Expert Labour Scarcity: Round a fourth of the surveyed MSMEs cite the shortage of expert manpower as one among their main challenges. Expert labour shortages are notably excessive in defence tools, readymade clothes, lodge sectors, tiles and sanitaryware as mirrored within the survey.
- Infrastructure & Know-how Gaps: Insufficient infrastructure and expertise adoption have an effect on productiveness and competitiveness; extra outstanding in sectors like auto elements, iron and metal and transport and logistics. A major proportion of the respondents cited expertise adoption as a serious impediment to their progress.
- Sustainability Efforts: Over one-third of MSMEs have adopted sustainable practices; 31% use energy-efficient methods, and 21% make the most of renewable vitality. Nonetheless, 33% cite restricted consciousness as a key barrier to additional adoption.
