In any country, the micro-, small, and medium enterprises (MSME) provide multi-faceted support to the economy. India comprehended the rewards of the MSME game and started a dedicated Ministry of MSME back in 2007.
MSME is an economic boon for the following reasons:
- The MSME sector employs over 50 million people in India which is 69% of the working population. This makes MSME, the second largest employer in the country.
- It contributes to 58% of the country’s GDP.
- Expertise and technical knowledge is rarely a requirement for the MSME hires.
- MSMEs have a wide range of employment prospects.
- They cover more than 45% of India’s overall export.
India houses over 55 million MSME, yet only 20% of them are financed formally. A Government-regulated credit structure is called Formal Finance. The following are the key reasons for the nonformal financial drill slaughtering India’s MSME growth prospective.
- The process of registration and loans are yet to be simplified by the Government.
- Most of the Indian MSME owners are unschooled and hence unaware of the MSME policies. They often find the process complicated.
- Over 47 million MSME are unregistered in India, lacking the chance to avail formal financing.
- Financial institutions have a low-risk appetite.
Download this document to learn the step-by-step approach for starting an MSME in India.
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