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Why Govt Needs To Promote Digitalization In The MSME Sector


An in-depth survey conducted by Yes Bank covering over 2,700 MSMEs (Micro, Small and Medium Enterprises) across 20 industries in India revealed a massive opportunity for digitalization in the sector. The study titled "Impact of Digitization on MSMEs" has identified some key drivers and barriers of adopting technological advancement in the business.

Why Govt Needs To Promote Digitalization In The MSME Sector

The study revealed that:

  • More than 60 percent of MSME respondents are digital users but only 5 percent have completely adopted digital technology.
  • Over 50 percent of the digitally enabled MSMEs are aware of the benefits of digitalization like increased profitability, operational efficiency, and better customer engagement but fail to adopt it due to lack of know-how and skilled manpower.
  • There is a need for government, banks, technology providers and corporates to work together to empower MSMEs so as to increase revenue, reduce costs and risk, and diversify market segments.
  • Greater digitalization will increase employment opportunities and ultimately overall economic growth.

The study pointed out that already existing strategic initiatives like 'Digital India,' 'Skill India' and 'Startup India' need to be fully leveraged so as to have a greater impact on MSME entrepreneurs and owners. The key stakeholders to help increase digital penetration are the government, leaders in technology and the industry, regulators, academia, and MSMEs themselves, it further identified.

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