Yes Bank conducted a five-month survey covering over 2,700 MSMEs across 20 industries from all over the country, to analyse the impact of digitisation on Indian MSMEs. The study, titled Impact of Digitization on MSMEs – the first large survey of its kind, identifies key drivers for digital adoption by MSMEs, as well as barriers and recommended measures for greater adoption of digital tech.
According to the survey, while over 60 per cent of MSME respondents are digital users, only five per cent have fully embraced digital technologies. Even though over 50 per cent of the digitally-enabled MSMEs highlighted several benefits (increase in profitability, operational efficiency and improved customer engagement), lack of know-how and skilled manpower emerged as key barriers for wider digital adoption.
The study underscores the need for government, banks, technology providers and corporates to work together for digitally empowering MSMEs, and hence resulting in increased revenues, lower risks, reduced costs and diversified market segments in the sector.
Greater digitisation of MSMEs has the potential to enhance the sector’s GDP contribution (from the current eight per cent share), heighten employment opportunities for India’s growing workforce and boost overall economic growth.
The study will be presented to key stakeholders including the government, technology and other industry leaders, regulators, MSMEs and academia, to bring together all stakeholders, with the shared objective of ensuring that digital penetration within the sector is accelerated and monitored on a regular basis.
“It is vital that existing strategic initiatives such as ‘Digital India’, ‘Skill India’ and ‘Startup India’ are fully leveraged to provide greater impetus to MSME entrepreneurs and business owners, thereby accelerating the wave of digitization in the sector,” Yes Bank said in a release.
Speaking about the initiative, Sumit Gupta, Senior Group President – Mid Segment, Multinational Corporate Banking, Government Banking, Agri Business & Knowledge, Yes Bank said, “The macro business environment that MSMEs are operating under is undergoing a transition. Digitisation is becoming increasingly vital for long term survival and future growth. The need of the hour is for MSMEs to take the lead and make digitisatisation an integral part of their business strategies. I strongly believe that the Yes Bank study on Impact of Digitisation on MSMEs in India will go a long way in enabling the MSME sector realise the true potential of digitization. Entrepreneurs who are successful in understanding the power of digitization and harnessing it across their value chain will lead this new wave of inclusive and sustainable growth.”