Micro, Small, and Medium Enterprises (MSMEs) are the growth drivers of the Indian economy and play a critical role in the equitable socio-economic development of the nation. The contributions of the sector are essential for fulfilling the vision of Aatmanirbhar Bharat, i.e. creating an economically self-reliant nation. The COVID-19 pandemic, however, has adversely impacted the sector and disrupted its growth.
ACCA (Association of Chartered Certified Accountants) has launched a report titled ‘MSME: THE AGENT OF ECONOMIC GROWTH AND DEVELOPMENT IN INDIA’, showcasing the rapidly evolving MSME landscape. ACCA has provided a handy checklist of recommendations for MSMEs to help them navigate their recovery roadmap to emerge stronger and resilient.
The report provides an in-depth insight into the various financing options available to MSMEs, including asset-based finance, alternative debt, hybrid instruments, and equity, as well as discusses how accountants can help MSMEs understand the complexities of available financial instruments, help them navigate the available opportunities and facilitate access to credit.
Dinesh Jangid, Audit Partner, Technology and Data & Analytics lead at BSR & Co. LLP, says, “Digital lending channels have further revolutionized the MSME credit landscape in India, with more and more enterprises recognizing the potential of fintech players to promote credit flow without compromising security.”
The report points towards several initiatives undertaken by the Government of India, to address the pressing challenges faced by the sector, promote ease of doing business, and boost its economic revival.
Vijay KR, Partner at Deloitte, says, “Instead of competing with large companies, MSMEs can stand out by focusing on untapped opportunities at the fringes rather than the broad belly of the market. That way, MSMEs can succeed with product/service differentiation.”
Md. Sajid Khan, Head of International Development, ACCA said, “The MSME sector with its inherent agility and dynamism along with the supportive government policies, is all set to overcome the current crisis. During these times, the role of an accountant becomes even more important as a trusted adviser that can guide an MSME through this challenge to develop a robust business which acts ethically and responsibly.”
The MSME sector in India is ripe with growth opportunities, provided the businesses leverage the existing resources and introduce key changes in the way they function, to unlock and achieve their true potential.
George Erumeda Varghese, CEO – Trinity Energy Solutions Ltd, says, “The country’s self-reliance will be based on five foundations: infrastructure, economy, demography, tech-driven systems, and demand. MSMEs can stand robust on all five pillars, thereby helping achieve the goal of self-reliance.”
The report helps analyze how the government has come out with stimulus packages to boost the MSME industry. These packages prioritize immediate financing needs while paving the way for strengthening and rebuilding SMEs.
To provide an impetus for the growth of MSMEs, ACCA’s report examines the opportunities that can help strengthen them by creating an ecosystem of innovation and collaboration.