Over 70 pc MSMEs optimistic about business growth in next 6 months: Khatabook survey
recently released its mid-year MSME Business Sentiment Survey results, showcasing that 71 percent of MSME businesses are highly optimistic about growth in the second half of 2022, and 5 percent expect a dip in this time frame. The survey was carried out across 7,295 Khatabook MSME users across all states and various business categories.
For MSMEs, the first six months of 2022 have been about transitioning back to the pre-pandemic ways of operating business. The business growth optimism sentiment has been steadily improving among retailers, wholesalers, distributors, and manufacturers.
This trend can be attributed to MSMEs' strong actual business performance in the first two quarters of 2022. According to the survey, 58 percent of MSME businesses confirmed improvement in the actual business in 2022. The first six months of 2022 have been growth positive for MSMEs across all categories and regions.
MSME ecosystems in all states are growth positive, with Telangana, Rajasthan, Maharashtra, and Gujarat at the top of the list. The survey indicates that all the categories have displayed growth, including those in negative growth in 2021, such as industrial services, stationery, and home furnishing. Pharma, salons, and restaurants/eateries are the top growth categories in the first two quarters of 2022.
About 66 percent of businesses mentioned they had no significant business-related issues. In contrast, others said weak demand, credit availability, liquidity, and payment collection were some of the major concerns.
Commenting on the key findings of the survey, Ravish Naresh, CEO and Co-founder of Khatabook, tells SMBStory,
"The survey also showcases the resilience and positive outlook of the MSME community towards business growth and willingness to adopt new methods that will help with growth momentum while handling the transitions. The feedback on challenges faced by MSMEs around Issues like credit availability, liquidity, and payment collection is in line with our product development focus at Khatabook."
Around 41 percent of MSMEs had reported improvement in the actual business in the second half of 2021, while 58 percent of MSMEs confirmed actual business improvement in 2022. The business improvement in 2022 is in line with the high optimism score for business improvement in Khatabook's previous survey results.
"We are seeing a steady improvement in the actual business performance. For the next two quarters in 2022, 71 percent is a high business performance optimism score by the MSME community. I hope the actual business performance feedback in the next survey aligns with this optimism score," he adds.
Only 14 percent of businesses saw a dip in 2022 compared to 23 percent in the last two quarters of 2021.
Khatabook and Biz Analyst by Khatabook provides MSMEs with digital business capabilities to manage their finances and day-to-day operations, and aims to empower MSMEs by making their business execution convenient, profitable, and efficient through its platforms.
When asked about the trends and future prospects of the MSME sector, Ravish says that the outlook on digital adoption in MSMEs is looking positive.
“Today's business environment is facing frequent transitions because of various external factors. The MSME community in India understands that digital helps them build resilient operating models for their businesses. The tech community needs to engage closely with MSMEs to ensure that the tech solutions are relevant to MSME business challenges. For example, a retailer may have a very different problem than a wholesaler or manufacturer. So, creating tech while keeping the context of MSME operations in mind is essential,” he adds.
Edited by Kanishk Singh