29 June 2024
Micro, Small, and Medium Enterprises (MSMEs) are the bedrock of the Indian economy, contributing significantly to employment, industrial output, and exports. Currently, there are over 6.3 crore MSMEs in India, making it a vibrant and dynamic sector of the economy. It is not only fostering entrepreneurship but also generating new opportunities for self-employment at a relatively lower capital cost, next only to agriculture.
However, the sector has faced numerous challenges, particularly in accessing credit and integrating into formal financial systems. The advent of Digital Public Infrastructure (DPI) presents a transformative opportunity to address these issues and propel the MSME sector to new heights.
As people increasingly rely on digital systems and services, the government has created DPI, comprising digital networks, platforms, and frameworks that allow citizens to exchange digital information and access digital services seamlessly. Just as real roads and bridges help to move goods and people, DPI creates digital pathways allowing people and services to interact digitally.
It offers MSMEs a pathway to overcome traditional challenges and create new opportunities for growth. By embracing DPI, MSMEs can streamline operations, access finance, reach new markets, and ultimately contribute to a more inclusive and robust economy.
According to the Economic Survey 2023, the bouquet of DPI products such as e-RUPI, EWay Bill, and TReDS has created significant value for MSMEs and reduced their compliance burden.
DPI addresses multiple issues that hinder MSME’s access to affordable credit by providing credible data points through a consent-based mechanism.
Furthermore, the use of Digilocker and Video KYC has enabled remote verification of KYC.
All these factors have led to a more inclusive credit underwriting approach and a low-cost credit delivery mechanism, making it easier for MSMEs to obtain affordable loans. We at Ambit Finvest are committed to supporting MSMEs in navigating this digital transformation and harnessing the full potential of DPI for sustained growth and job creation.
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