Whatsapp and Whatsapp Business Dominate MSME Landscape With a 97% Usage Rate: Report 43 per cent prefer UPI at Micro, Small, and Medium Enterprises (MSME) while 38 per cent lean towards Aadhaar Banking for last-mile banking services.
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As much as 31 per cent of Micro, Small, and Medium Enterprises (MSME) highlighted that technology has fueled their growth by streamlining operations. Meanwhile, 27 per cent experienced a boost in sales and revenue owing to technology integration. On the flip side, the primary hurdles include a reluctance to embrace new technology, reported by 36 per cent, and the significant costs involved, which troubled 18 per cent. Notably, English emerged as the favoured language for comprehending technology and conducting business, with 52 per cent of respondents preferring it, followed by 21 per cent who opted for Hindi, as per report from PayNearby.
In the realm of financial services, UPI and Aadhaar banking emerged as the top choices for MSMEs at the last mile at 43 per cent and 38 per cent, respectively. WhatsApp and WhatsApp Business dominated the messaging landscape, with an impressive usage rate of 97 per cent.
The report, now in its second edition, draws from a comprehensive nationwide survey of over 10,000 MSMEs in the retail sector, including kirana stores, mobile recharge outlets, medical shops, customer service points (CSPs), travel agents, and more.
Anand Kumar Bajaj, founder, MD & CEO of PayNearby said, "The MSME sector is pivotal to our economy, and their adoption of digital technologies is crucial for India's growth. The MSME Digital Index 2024 showcases significant progress in technology adoption while highlighting persistent challenges. We believe that MSMEs should be supported in their digital transformation journey and ensure that technology's benefits reach every corner. By leveraging artificial intelligence (AI), augmented reality (AR) and machine learning (ML), MSMEs in rural India can thrive in a digital-first economy. We must foster an inclusive ecosystem that enhances skills and removes barriers, enabling all businesses to embrace digitalisation. Together, we must envision a future of limitless opportunities, driving economic growth and social upliftment in the real Bharat."
The findings reveal that 75 per cent of small business owners aged 18 - 30 are the most tech-savvy, with over 87 per cent in this demographic using smartphones for their daily business activities and accessing digital content. They are closely followed by those in the 31 - 40 age bracket. Interestingly, 36 per cent of these young entrepreneurs reported earning more than INR 15,000 per month. The pervasive use of smartphones underscores the internet's vital role in bridging infrastructure gaps and fostering technological inclusion among MSMEs at the grassroots level.
Digital devices are primarily used for work, with 36 per cent of respondents spending 4-6 hours on their phones daily. However, for leisure activities like social media or online entertainment, 66 per cent spend less than 3 hours. YouTube is the most preferred app, with 41 per cent using it for social media and 72 per cent for entertainment. Interestingly, 58 per cent of respondents do not have any gaming apps installed on their phones.
Smartphones are the top digital device of choice, favoured by 70 per cent of users. Among those surveyed, 68 per cent use smartphones for business activities, consuming between 2GB to 5GB of internet daily. Impressively, over 51 per cent of these businesses spend less than INR 500 per month on internet usage. Initiatives like the Digital India mission and BharatNet have significantly boosted internet penetration in rural areas, making it affordable and narrowing the digital divide. For internet access at work, approximately 66 per cent rely on mobile hotspots, followed by 26 per cent who use Wi-Fi routers. Only 5 per cent use Ethernet cables and 3 per cent use dongles. At home, 75 per cent depend on mobile internet for connectivity.
Among tech-savvy MSMEs, 29 per cent use accounting software, followed by 17 per cent who use point of sale (POS) software and 14 per cent who use customer relationship management (CRM) software to manage their operations. Conversely, 6 per cent of respondents do not use any software, preferring manual methods instead. As per the report, 41 per cent said they use digital devices in their business operations to streamline financial transactions and track business expenses efficiently, while 18 per cent use technology to accelerate processes. This underscores the necessity of fostering a robust tech ecosystem to empower MSMEs and drive their growth for a stronger Bharat.
Commenting on the MSME Digital Index, Jayatri Dasgupta, CMO, PayNearby, said, "This comprehensive report underscores the importance of digital literacy and infrastructure in empowering MSMEs. Our findings show a promising trend of increasing tech adoption, but also point out the areas that require more focus and investment. There is a need to innovate and provide solutions that bridge the digital divide and drive progressive growth."
Focusing on women respondents, who represent 32 per cent of the survey, Jayatri highlights the pivotal role technology plays in fostering women's empowerment and financial independence. Among the female respondents, 85 per cent own smartphones, enabling their engagement in digital transactions.
"The growing usage of digital payments, at 40 per cent among women entrepreneurs, underscores their confidence in leveraging technology for business growth," she added.
