Achieving Sustainable Growth in a Changing World.
MSMEs play a crucial role in India’s economic growth as they account for almost a trillion dollars of the economy annually. These enterprises, from traditional craftsmen to innovative startups, reflect the entrepreneurial ethos that is part of the Indian psyche. MSMEs are crucial to India’s $5 trillion GDP goal by 2025. Experts forecast an increase to $3. 7 trillion by FY24 and the IMF at $4. 2 trillion in the following year. MSMEs alone could grow from $1.1 trillion to over $2 trillion by 2024 and create 50 million jobs.
Challenges and Solutions
MSMEs have many opportunities but also a lot of challenges. Formal credit is hard to get because of its stringent conditions and long approval processes which affect technological adoption and growth. Most of the MSMEs face issues of digitalization, efficiency, and accessing the global market. They lack the marketing resources and are competing with the informal businesses. They are the ones that face difficulties in getting the necessary assistance even with support from the government. Developing their research and development capabilities is another challenge; and global economic changes affect their exports and financial stability.
NBFCs: Empowering MSMEs
The impact of NBFCs on MSMEs is far-reaching and positive. NBFCs provide customized financial services to these enterprises, ranging from short-term working capital to long-term investment financing, which traditional banks cannot offer. This agile and innovative approach assists in MSMEs’ expansion, export promotion, and employment creation, which makes them the backbone of India’s economic development.
