World MSME Day 27th June 2023: World MSME Day, observed on June 27 every year was established by the United Nations General Assembly in 2017 to raise awareness about the importance of micro, small, and medium-sized enterprises in promoting inclusive and sustainable development worldwide.
MSMEs play a crucial role in the global economy as they contribute significantly to employment generation, poverty reduction, and economic growth. They are considered the backbone of many economies, particularly in developing countries. MSMEs often operate in diverse sectors such as manufacturing, services, agriculture, and trade, contributing to innovation, entrepreneurship, and local development.
The observance of World MSME Day aims to highlight the significant contributions of MSMEs and to recognize their potential as a catalyst for economic growth, job creation, and poverty alleviation. It provides an opportunity to raise awareness about the challenges faced by MSMEs, such as limited access to finance, technology, skills development, and market opportunities.
World MSME Day serves as a platform for governments, policymakers, business associations, organizations, and individuals to collaborate, exchange knowledge, and promote initiatives that empower MSMEs. It highlights the importance of supporting and investing in MSMEs to achieve sustainable and inclusive economic development at both the national and global levels.
According to a note by the United Nations Conference on Trade and Development last year, formal and informal MSMEs make up over 90 per cent of all companies worldwide and have a share of, on average, 70 per cent of total employment and 50 per cent of GDP.
Among other important facts on SMEs worldwide is that 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes SME development a high priority for many governments around the world, according to the World Bank. Moreover, in emerging markets, most formal jobs are generated by SMEs, which create 7 out of 10 jobs.
According to the International Finance Corporation (IFC), around 65 million firms, or 40 per cent of formal MSMEs in developing countries, have an unmet financing need of $5.2 trillion every year, which is equivalent to 1.4 times the current level of the global MSME lending.
East Asia and Pacific accounts for the largest share (46 per cent) of the total global finance gap and is followed by Latin America and the Caribbean (23 per cent) and Europe and Central Asia (15 per cent).
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“The gap volume varies considerably region to region. Latin America and the Caribbean and the Middle East and North Africa regions, in particular, have the highest proportion of the finance gap compared to potential demand, measured at 87 per cent and 88 per cent, respectively. About half of the formal SMEs don’t have access to formal credit. The financing gap is even larger when micro and informal enterprises are taken into account,” as per IFC.
In India, there are around 63 million MSMEs, as per the MSME Ministry FY23 annual report citing data from the National Sample Survey (NSS) 73rd round conducted during 2015-16. This was the second highest after China’s around 140 million micro and small enterprises. The constitutes about 30 per cent of India’s GDP and over 40 per cent of its exports and has created 110 million jobs.
In contrast the MSME Day, India also observes National Small Industry Day annually on August 30 to celebrate the contribution made by the small-scale industry to India’s growth. On August 30, 2000, the government had reportedly launched an extensive policy package for small industry and since then the National Small Industry Day is observed in the country.
