Only 5 pc of MSMEs have adopted digitisation, 50 pc don’t see the benefits: YES Bank survey
A YES Bank survey revealed that out of 2,700 MSMEs studied, only five percent have fully embraced digital adoption. Media reports say that the research conducted by the private sector lender considered full-scale technology adoption as the use of cloud services, ERP, CRM, account management software, digital banking, and more.
Titled ‘Impact of Digitisation on MSMEs’, the survey covered 20 industries such as manufacturing, textiles, engineering, healthcare, IT and ITeS, food processing, printing, electronics, etc.
Of the MSMEs surveyed, 63 percent said they are going digital, while only 50 percent perceived profitability and operational efficiency as benefits of going digital. However, over 80 of digitised MSMEs indicated overall positive digital experiences.
Sumit Gupta, Senior Group President, Mid-segment, Multinational Corporate Banking, Government Banking, Agribusiness and Knowledge, YES Bank, said, “The macro business environment that MSMEs are operating under is undergoing a transition. Digitisation is becoming increasingly vital for long term survival and future growth.”
Data showed that general lack of understanding in choosing the right technology solution, and low impact on overall profitability were the key challenges in technology adoption. This was followed by the lack of skilled manpower to operate technology, lack of trust in technology, and the high cost of equipment.
“The need of the hour is for MSMEs to take the lead and make digitisation an integral part of their business strategies. Entrepreneurs who are successful in understanding the power of digitisation and harnessing it across their value chain will lead this new wave of inclusive and sustainable growth,” Gupta added.
The survey was also found that MSMEs in IT & ITeS, food processing, engineering, manufacturing, healthcare and pharmaceuticals had higher levels of digital adoption. 60 percent of these businesses using advanced tech listed that getting a competitive advantage and increase in productivity were key reasons for adoption.
Other findings of the survey:
- 56 percent believed that the government is doing enough to boost technology adoption among MSMEs
- 60 percent feel that tax incentives and subsidised loans for purchasing equipment would boost adoption of technology.
- 51 percent of MSMEs have so far availed digital banking services. They are primarily using internet and mobile banking services, followed by digital wallets, payment solutions, and online bill payments.
The YES Bank survey also recommended a Skill India programme for MSMEs to improve technology know-how. It also advocated a centralised MSME support centre for finance, HR, marketing, and building awareness around ICT solutions and government schemes, training programmes, etc.