Two-thirds of Indian MSMEs moving to online sales post COVID-19: Report

Micro, small, and medium-sized enterprises (MSMEs) are embracing digital services with about 66 percent moving to online sales post COVID-19, according to a report by fintech platform NeoGrowth Credit titled "MSME Insights Report 2022."

MSMEs are digitally "much stronger" now, the report said. Small businesses in Hyderabad have the highest number of digital transactions followed by Bengaluru.

India houses about 6.3 crore MSMEs in India which contribute about 30 percent to India's GDP and employ over 11 crore people. COVID-19 affected the financial health of these enterprises, impacting their working capital needs, revenues, daily operations, supply chains, and more.

However, with economic activities now in full swing, MSMEs are hoping to bounce back to their pre-pandemic levels and some hope to surpass those numbers.

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This report by NeoGrowth highlights key trends observed in the MSME ecosystem during different phases of COVID-19 disruption. The report is based on data from 40,000 customers over 25 cities which include a mix of metro and non-metros.

It also noted that small and medium-sized businesses are growing by focusing on three things—keeping their businesses updated with the latest technology (and compete against large corporates), getting services required to run their businesses efficiently, and finally, identifying recommendations and options to navigate the business transformation journey.

Another key observation was how the credit demand is getting back on track in the market after two years. For now, 85 percent of the credit demand has been revived in March 2022 versus February 2020.