The third MSME Sampark Report, published jointly by UGRO Capital and Dun & Bradstreet, finds encouraging trends in India's MSME segment. In spite of difficulties like high capital expenses and conservative credit flows, 64% of MSMEs have restarted operations post-pandemic, with 54% witnessing more than 10% YoY growth. The report presents a mixed picture of the sector's revival, pointing towards potential for additional formalization and investment
Post-Pandemic Recovery:
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64% of MSMEs have restored activity, illustrating resilience following disruption by the pandemic.
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More than half (54%) of such firms indicated YoY growth greater than 10%, demonstrating impressive momentum.
Investment Trends:
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Investment expansion by Udyam-registered MSMEs has decelerated from FY22's 61% to FY24's 23%.
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Redefined MSME classification benchmarks will propel forthcoming investments and enlargement.
Credit Accessibility and Lending Habits:
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Disbursement of loans has slowed because of tighter risk evaluations, opening opportunities for NBFCs to fill the credit gap.
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Formalization of the MSME sector is on the rise, with lower use of cash and better debt-to-turnover ratios in mature units.
Sectoral Insights:
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Small companies are positive about domestic growth in Q1 2025, while large and medium enterprises anticipate lower growth.
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Optimism regarding exports has reduced because of geopolitical tensions and protectionism in trade.
Challenges Ahead
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High capital expenses are likely to continue in Q1 2025, impacting investment choices adversely.
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Micro businesses face difficulties in accessing funds as financiers move towards asset-backed funding structures such as gold loans.
Sources: PRNewswire, Business Standard, Economic Times, Entrepreneur India