Indian micro, small, and medium enterprises (MSMEs) have expressed their top demand for an ‘Instant Line of Credit’, according to a survey conducted by fintech platform Kinara Capital. The survey, which included input from 2,600 formal MSMEs across India, found that 55% of respondents required immediate approval of credit to accelerate everyday business decisions. The lack of short-term credit has been the biggest hindrance for MSMEs’ growth, as claimed by over 38% of respondents. Manufacturing MSMEs have the strongest demand for instant credit at 60%. The survey also revealed a need for flexibility in repayment products and support on tax filing, accounting, and GST calculation.
A significant number of MSMEs require ‘Flexible Repayment Products’ that offer the choice to make daily/weekly or variable loan payments, based on their business turn-over for a particular time period. Additionally, 30% of MSMEs are seeking expert guidance on accounting and tax-related services. Another 21% want to enhance their digital presence by developing websites and digital platform visibility.
Small businesses, especially MSMEs, have also highlighted their struggle with freight logistics and costs for local goods transport. A dedicated 4-wheeler commercial vehicle is desired by 15% of the MSMEs. Another challenging area for the sector is to keep up with quarterly GST and Income tax filings. However, support and personal finance are also seen as critical areas, as 9% of MSMEs seek guidance on financial investments and insurance.
The MSME sector contributes to 30% of India’s GDP and almost 50% to exports. Founder & CEO of Kinara Capital, Hardika Shah, believes that small business entrepreneurs in India are seeking much more than access to formal credit. She states that tailored products and services aligned with their growth needs are required.
The demand for instant credit indicates that Indian MSMEs require quick action in routine business decisions like purchasing raw materials, hiring additional employees for a seasonal product run, or renovating business premises. The results of the survey also emphasize the need for support in a variety of critical areas faced by Indian MSMEs.
