The MSME sector has, for decades, been the growth driver of the Indian economy. Its pivotal role in guaranteeing the upward trajectory and resiliency of the country’s macroeconomic dynamics cannot be denied. A look back at the state of affairs sheds light on the many miles the segment has covered. Today, MSMEs don’t just account for 40% of India’s exports but are also instrumental stakeholders in helping the country meet its ambitious target of achieving $1 trillion in exports by 2030.
However, the segment remains marked by uneconomical and, at times, unstructured trade practices. Moreover, the segment is simultaneously hobbled by stunted credit flows and uncooperative banks and formal institutions, which forces small players to rely on disreputable sources of finance. Alleviating these credit issues requires sustained efforts powered by comprehensive and exhaustive policies that make it profitable and lucrative for financing stakeholders to enthusiastically back robust and sound MSME players.