Capital allocation that reaches deserving MSMEs will result in inclusive growth
1 year, 2 months ago

Capital allocation that reaches deserving MSMEs will result in inclusive growth

Live Mint  

The numbers represent both an opportunity and a challenge: India has 63 million micro, small and medium enterprises, contributing almost a third of the country’s GDP and half of its exports, with an equal spread between rural and urban areas, that are mostly short of credit. “I got 99 problems and money ain’t the only one"—these adapted lyrics from rapper Jay Z’s monster hit 99 Problems could well be the collective refrain of MSME entrepreneurs in India. It’s useful to view MSME growth prospects through three lenses, as follows: Customer base expansion: India’s economic rise is pegged to the promise of increased demand. In September 2023, BMI forecast that India would become the world’s third-largest consumer market by 2027, on the back of a 29% increase in real household spending. The government, financial sector, various industry associations and sector-specific bodies need to come together to build and maintain a ‘capital-plus-plus’ environment that is imperative for India to reach its ambitious economic goals.

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