Employing nearly 11 crore people and accounting for 29 percent of the GDP. MSMEs have seen tremendous growth in the years before the pandemic. But after more than a year of disruption, MSMEs will have to work doubly hard now to regain their strength.
In 2021, it will be crucial to restoring the economic momentum of MSMEs to give the country’s GDP growth rate.
MSMEs will have to watch out for opportunities for sales and distributions, and identify new methods to expand their business. They would also need access to easy credit, at low costs, which can ideally be achieved through MSME loans.
Let’s take a look at what the future of MSMEs looks like in 2021
Enabling Technology Access for MSMEs:
Low technology penetration is a fundamental problem resulting from the total cost of ownership (TCO) being too high. This scenario can be expected to change in 2021.
Greater investment in BharatNet and other FFTH programs to bring low-cost internet connectivity to roughly 150,000 villages in India.
MSMEs can certainly benefit from this by increasing their reach through various well-established B2B platforms.
Increased Sales & Distributions:
With this expansion in reach, MSMEs are bound to see spurts in their sales figures. 5G infrastructure and other digitization will enable them to distribute their goods and services to larger parts of the population.
For any funding requirements, they just need to meet the MSME loan criteria. They will have small amounts of capital ready almost immediately.
Quite cleverly, many MSMEs manufacturing non-essential items had switched their line of business to essential goods, through the worldwide pandemic.
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Not every MSME has been able to achieve this shift because the variable costs for business expansion are quite high. Technology enablement is set to become 2021’s game-changer for MSMEs to help them recover post-pandemic. The focus will be on sustainable digital expansion.
Greater customer outreach and market penetration:
Offline methods of customer outreach and market penetration pose a high risk to MSMEs because they are not outcome-based.
Through digital platforms, MSMEs can penetrate up to 70 percent more, including markets within the nation and on a global level. Previously remote locations have now become so easily accessible.
And if they face any funding trouble, small businesses can meet MSME loan criteria and easily apply for loans.
Enhancing Supply Chain Finance:
All through this pandemic, MSMEs have faced the challenge of delayed payments. Although government legislation requires MSME payments to be cleared within 45 days. The enterprises require sources for short-term credit within the supply chain.
MSME loans can help with supply chain finance allowing for smooth functioning of the business on a day-to-day basis. More financiers are offering collateral-free loans to MSMEs to enable them to regain their lost momentum.
Empowering MSMEs to become self-reliant:
It’s important that MSME units constantly strive to make their internal supply chains faster. More transparent, highly cost-efficient, and even safer.
Collaborations with B2B networks can help MSMEs at a local capacity to expand to greater domestic and international trade opportunities. Eventually, add to the gross value of global manufacturing.
Although the future may have looked bleak when the dreaded coronavirus hit the world. MSMEs have much to gain in this post-pandemic era.
With tremendous digitization throughout the country, MSMEs should have no trouble achieving greater customer reach.
Here’s where MSME loans can become all the more significant, by providing the right kind of funding and repayment flexibility.
You can avail of a collateral-free business loan from Bajaj Finserv is an easy online process and get a high-value loan.