How MSMEs can take Indian economy to new heights with the right digital tools

With the onset of the COVID-19 pandemic, the world learned new ways of living life, doing business and serving customers. On a positive note, this global medical emergency accelerated the adoption of new technologies and gave birth to a new generation of entrepreneurs. Apart from forcing people to rethink jobs, influencing companies to adopt the remote working culture and adopting new technologies, the fear of this contagious infection accelerated the demand for new business methods like contactless deliveries.

During a TechSparks discussion titled ‘Strengthening MSMEs with the right digital tools’, Avinash Godkhindi, MD and CEO, Zaggle; Amit Jain, Business Head Product Management and Alternate Sales - SME Banking, YES Bank; Mainak Sarkar, Co-founder and CEO, Explorex; Swarup Bose, Founder and CEO, Celcius; and Sandesh Jayarama, VP-New Business Initiatives at Perfios talked about the necessity and impact of right tools and technologies on the growth of micro, small and medium enterprises in India.

Leveraging tech to solve operational gaps

Celcius Logistics Solutions is one such business that was born amidst the pandemic to aid in solving the COVID-19 vaccine crisis of India. “Soon after developing the technology that could digitise the cold supply-chain network in India, we helped distribute COVID-19 vaccines throughout the country,” said Swarup of Celcius Logistics Solutions.

While the pandemic influenced Swarup to develop the technology that improves the efficiency of the cold supply-chain network in India, it induced Mainak of Explorex to build a full-stack ecosystem that helps restaurants realise their full potential and reduce dependency on human resources for manual work.

“We figured out that the restaurant industry was suffering from a lack of innovation. Most of the companies that started 10 years back had stopped developing, and they were just shipping the things that they had built out, ”said Mainak. To address this problem and help restaurants operate efficiently, Explorex offered solutions like customer data management, inventory management, vendor management, and payment management.

Talking about the contribution and importance of MSMEs in India, Amit of YES Bank said that MSMEs supported the country during the pandemic – be it infrastructure, food or medicine. But, their need of the hour was funds and they did not have the ability to physically visit the bank to borrow money. “We took a step and changed the way the money lending business works. We experimented with different techniques, went into the digital footprint, and used those footprints as a surrogate of believing customers and delivered the funds with a lesser amount of documentation,” added Amit.

How digitisation helps MSMEs

The pandemic accelerated the need for digitisation more than ever before. “The whole world was asking small-and-medium-sized businesses to digitise. But, who was going to help them transform from the traditional way of doing business to the digital mode? So, we stepped in and provided MSMEs with the right digital tools to digitise their business. We provided them with our expense management platform and demonstrated how they can grow their business digitally in terms of cash flow and money,” said Avinash of Zaggle.

Supporting MSMEs with the right tools is essential for a country’s growth as these small-and-medium-sized enterprises not only employ a lot of people but also contribute to around 27 percent of India’s GDP. Adding to that, Sandesh of Perfios, said that MSMEs are only accessing about 6-7 percent of the available credit in the country, indicating a huge scope to bring them into the whole lending lifecycle.

“So, we at Perfios help financial institutions like YES Bank with information and insights so that they can validate customers on the basis of the stability of the customer, their identity, ability and intent to repay. To digitise the whole ecosystem and collect as minimal information as possible, we use our proprietary technology, which is backed by deep data science technologies,” added Sandesh.

Talking about how new fintech companies can equip and strengthen MSMEs with the right digital tools, the panellists suggested that fintech companies must earn customer trust first to get their adaptability. Along with ensuring the product is easy to use, fintech companies must also make sure that the product is available in their target audience’s preferred mode of communication and language.