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MSMEs Demand Instant Line Of Credit & Industry Networking as Topmost Priorities: Report 55% MSMEs want instant line of credit to accelerate everyday business decisions, as their topmost priority. One-fourth of MSMEs say industry networking with their supply chain ecosystem is critical for their growth.

By Sujata Sangwan

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According to a report, the most important necessity for MSMEs in the financial services category is an instant line of credit, and the topmost requirement in the non-financial services category is industry networking. Over 38% of MSMEs cite lack of simple access to or non-availability of short-term loans as the key barrier to their growth as the largest challenges they encounter.

The top priorities of India's small business owners were recently revealed by an MSME Sentiment Survey performed by the fintech startup Kinara Capital.

The survey was conducted with input from 2,600 formal, Udyam-registered MSMEs from Karnataka, Gujarat, Maharashtra, Andhra Pradesh, Telangana, Tamil Nadu, and UT Puducherry. These firms span the manufacturing, trading, and services sectors.

As per the report, MSMEs want to grow their companies quickly and are searching for creative and comprehensive services to help them do so. The three main conclusions from the survey's results are related to the themes of Instant Financing, Supply Chain, and Business Services.

Instant Financing

One out of every two surveyed MSMEs desire a fast line of credit to hasten daily business decisions. According to the survey's further findings, more than half (55%) of the questioned MSMEs selected instant line of credit as their preferred financial product for their companies.

For MSME owners who need to take quick action, a line of credit can make routine business decisions easier. Examples include buying raw materials to fulfil an unexpectedly large order, quickly hiring more staff for a seasonal product run, renovating the business location, or performing unforeseen machine repairs.

The demand for instant line of credit is highest among manufacturing MSMEs, with over 60% of them requesting this product, indicating increased economic growth in India.

Supply Chain Linkages

One-fourth of MSMEs feel their supply chain ecosystem's industry networking is essential to their growth.

Since less than 5% of India's supply chain is digitalized, according to industry analysts, MSMEs found weaknesses in the physical supply chain and had trouble locating suitable buyers and sellers. Particularly, the logistics of goods and the prices of local goods transportation are a problem for micro-MSMEs.

MSMEs are looking for all-encompassing support to expand their businesses at an increasing rate. In order to enhance access to buyers and sellers, close to a quarter (24%) of the respondents said they would like assistance with industry networking, particularly with their supply chain ecosystem. Many of them also said they would be willing to pay for the service.

15% of those surveyed stated they wanted a special 4-wheeler commercial vehicle for their firm, while 10% said they wanted a 2-wheeler.

Business Support Services

MSMEs increasingly turn to business support as a crucial sector for expert advice on services like business accounting, tax filings, GST calculation, and filing support.

Due to a lack of knowledge of the procedures, MSMEs have difficulty submitting their quarterly GST and income tax returns on time. MSMEs look to reputable accountants and tax professionals for advice and assistance with tax filing.

As their top non-financial service demand, business accounting and GST filing support was requested by 30% of surveyed MSMEs.

21% of MSMEs wish to improve their online presence by developing websites, listing their platforms online, and signing up for online trading platforms.

9% of MSMEs desire assistance with their personal finances, particularly with insurance and investments.

"MSMEs contribute 33% of India's GDP, 50% of its exports, and 19% of its employment. It is evident that MSMEs will continue to play a crucial role in India's growth story as these small and growing businesses enable inclusivity, not just economically but also socially. As an impact investor, we strongly believe in the potential of MSMEs and have been working closely with them to drive positive social, environmental, and economic outcomes, with a determination to help them achieve their full potential," said Sowmya Arunkumar, Principal, C4D Partners.

Sujata Sangwan

Former Sr. Correspondent

Sujata is an engineering graduate and has done her Post Graduation in Human Resource Management. She has a deep interest in startups, venture capitalists & technology. 

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