Economic Undertakings

How Technology Adoption Helped Indian MSMEs Advance and Grow

The story of Indian MSMEs is one of courage, conviction and change. Statistics reveal a spread of 63 million micro, small and medium-sized enterprises (MSMEs) which form the backbone of the Indian economy, contributing 30% to India’s GDP. Multiply the efforts of MSMEs with those of a government that wants to seize all available opportunities to support these businesses. The result is a clear road to true success for present and future generations.

The share of exports of MSME-related products in all Indian exports stood at 49.4% and 49.8% for years 21 and 20, respectively. Budget allocation for MSMEs in FY22 more than doubled to Rs 15,700 crore vis a vis Rs 7,572 crore in FY21. Both of these points to the potential that India sees in the country’s MSME players, which would not have been possible without the industry’s eagerly-engaged technology adoption.

Armed with the timely pivot towards technology-driven innovations via globally recognized frameworks such as India Stack and Unified Payment Interface (UPI), as well as Aadhaar, Indian MSMEs have reinvented themselves to marry their business needs and challenges with technological know-how and adoption to move forward.

Here are five key areas where technology has been used to get things done:

Technology-driven credit and lending

The disbursement of credits and loans to meet the daily needs of an MSME unit is a bottleneck that was first solved with the advent of technology. As a result, in FY21, loan disbursements to MSMEs amounted to 9.5 trillion rupeesa 40% increase from Rs 6.8 trillion in FY 2020.

Government programs such as a second loan for the modernization of existing PMEGP/MUDRA units aim to provide existing units with modernization assistance for expansion. In addition, the Financial Aid to Performing Units and Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE) aims to motivate first-generation entrepreneurs towards self-employment by providing credit guarantee financing for third parties without guaranteed or without guarantee. free loans. These are some of the examples of patterns made possible by technology.

The service sector has been approached through mechanisms such as the Special Credit-Linked Capital Grant Scheme (SCLCSS), enabling businesses in the service industry to meet various technical requirements.

In addition to government initiatives, many trade finance companies, banks and financial institutions, including high net worth individuals, have designed credit and loan solutions that help pool capital for credit-starved MSMEs to to generate and distribute certain popular products and services. globally. It has given a boost because of how well-connected the world has become through technology.

Technology-driven infrastructure and exports

Building a global supply chain was unthinkable just ten years ago. Fast forward to the time when the world experienced its biggest pandemic in a century, and yet the flow of goods and services did not completely stop; he only stopped until restrictions were eased.

With the help of technological tools and frameworks such as blockchain, the world is now connected so that one can place an order in Vietnam, track it across continents to the United States, deliver it to Mexico and collect payments from France. Artificial intelligence and machine learning have made processes reliable and watertight.

Predictive analytics tools promise continuity of contracts and ensure that their deliveries are fully supported. Such an advanced way of doing business is the gift of using real-time technology to manage infrastructure and complete economic cycles.

Technology-driven marketing and sales

Building products and services is one aspect, and bringing the end product to the world is another. Retail giants have proven what well-oiled goods and services machines can do to cater to global consumption and their presence in India is no exception.

Initiatives such as the Government e-Marketplace (GeM), from which ministries and public sector companies source, are helping MSMEs market their offerings like never before. For example, since March 24, 2022, the GeM portal has served 9.63 million orders worth Rs 219,071 crore from four million registered sellers and service providers for 59,259 buyer organizations. This is a testament to how technology-driven marketing alone enables Indian MSMEs to thrive in all ecosystems around the world.

In addition, the Procurement and Marketing Support (PMS) program also aims to develop the marketing of services and products in the MSME sector. It promotes access initiatives and awareness of various topics relevant to marketing. It also shows the technological advances that have helped Indian MSMEs to move towards a more globalized business environment.

Technology-driven payments and settlements

Data suggests that Indian MSMEs are rapidly embracing digital payments over cash, with 72% of payments being made digitally, compared to 28% of cash transactions previously. This was only made possible with the advent of technology-driven payment solutions, an area where India has been a global leader thanks to the efforts of NPCI.

Agility in the ability to receive and make payments makes a strong case for the world to interact with each other for commerce. This not only solves a business problem but also ensures trust and commitments in payment cycles and settlements. Such processes present a bright opportunity for Indian MSMEs who have quickly adapted to digital payment methods and want to learn faster.

Technology-led training and skills building

At the heart of real growth are succession plans. The technology used today will decide what Indian MSMEs learn in the future.

Many progressive government programs such as the Lean Manufacturing Competitiveness for MSMEs program aimed at improving the manufacturing competitiveness of MSMEs, the ESDP (Entrepreneurship and Skill Development Programme) program aimed at promoting new businesses and enabling/facilitating capacity building existing MSMEs, to name a few, have only been possible with the help of technology-driven solutions.

The sooner Indian MSMEs embrace such initiatives, the sooner the skills building process will help them leapfrog into a highly competitive global arena.


The role of technology can no longer be ignored by Indian MSMEs, who will be at the forefront of building India 2.0. Make in India, Digital India and Skill India all have a common goal: to strengthen the backbone of the economy.

To become a true success story, Indian MSMEs must embrace what lies ahead, build resilient business models and create a future to advance technology, by technology and for technology.

Edited by Teja Lele Desai

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)