The latest edition of the FE Emerging Business Growth Workshops in Hyderabad enabled conversations around three factors integral to the faster and better growth of the MSME ecosystem: technology, credit, and ease of doing business. Presented by Dell Technologies and Intel, Digital Transformation Partner Vi Business and Associate Partner SIDBI, the half-day workshop on July 31 kicked off with a Guest of Honour address by Jayesh Ranjan, IAS, Special Chief Secretary, Department of Industries & Commerce and Department of Information Technology, Electronics and Communications, Government of Telangana.
Key MSME Challenges Identified
Speaking on the upcoming Telangana MSME policy, Ranjan said that based on the consultative exercise with all key stakeholders involving meetings, surveys and visits to MSME clusters, six challenges faced by MSMEs in the state were identified: credit, technology, land, recruiting talent, access to raw material, identifying right markets.
With respect to technology, Ranjan noted that a large number of MSMEs in the state, particularly micro units in MSME clusters, were found to be using “19th-century technology.” Similarly for digital technology, Ranjan noted that almost 80 per cent of micro units were not using even basic services like email.
“So, in the new policy, the government will focus on providing technology solutions. At least in the major 10-15 manufacturing sectors — where a large number of MSMEs are present such as plastics, electronics, machine tooling, food processing, etc., — we will prepare a menu of all modern technologies available, their cost and how much they can improve productivity of MSMEs,” said Ranjan.
Moreover, the government has been in talks with banks for a new fund ‘Yantram’ to be added to the new policy for MSMEs, he added.
For adoption of digital technologies among MSMEs including e-commerce adoption, ERP tools, payment gateway solutions, inventory management tools etc., the government will purchase bulk licenses from large technology solutions companies and provide to MSMEs at discounted cost, Ranjan said. The new Telangana MSME policy is awaiting Cabinet approval.
Technology For Growth
The Guest of Honour address was followed by the workshop’s keynote address by Samriddhi Bhattacharyya, Director, Small Business, Dell India on the subject “The Tech Advantage: Tools and Trends for MSMEs.”
Bhattacharyya noted key technology barriers to innovation such as the struggle to turn data into real-time insights, the absence of holistic end-to-end security strategy, battling complexity at the edge, the challenge for people to securely work from anywhere and more.
“Without technology, you cannot move ahead. Whether you are a small business or a startup, everyone needs it. You have to take a prudent approach on whether you are resilient enough if something fails, do you have sufficient level of AI and ML to enhance your productivity and whether you have advanced analytics capabilities?” said Bhattacharyya.
She explained how technology is the most dependable partner for MSMEs to achieve operational efficiency, market research, streamline distribution, manage payments and serve customers.
Democratising Credit Access
The workshop also hosted a powerful panel discussion on democratising credit access for MSMEs having top MSME voices from Hyderabad including K Rama Devi, President, Association of Lady Entrepreneurs of India (ALEAP); Narender Vunyale, Associate Professor, SVKM’s NMIMS, Hyderabad; R. Ravi Kumar, Sr. Vice President, Federation of Telangana Chambers of Commerce and Industry (FTCCI); S Glory Swarupa, Director General, National Institute for Micro, Small and Medium Enterprises, Hyderabad; and Vemuru Chandramouli, General Manager, SIDBI.
“At the grassroots level, a lot needs to be done as getting credit from banks is very difficult. Somehow, we need to come out of NBFCs. If they continue then it is dangerous because as per the RBI norms, they are supposed to lend the money at reasonable interest, but entrepreneurs still pay around 21 per cent interest,” said FTCCI’s Ravi Kumar.
Highlighting the digitisation of the loan process for MSMEs at SIDBI, the principal financial institution for MSMEs in the country, its General Manager Vemuru Chandramouli said SIDBI has come a long way as far as digital intervention is concerned.
“We have undertaken end-to-end digitisation of direct credit operations from pre-origination to disbursements and monitoring level. This involves leveraging Digital Public Infrastructure such as GST, ITR, bank statements, credit bureaus, e-KYC etc which we have integrated with online application for loans,” he said.
K Rama Devi from ALEAP in her comments pointed towards the issue of NPAs and rating systems in the MSME sector.
“If MSMEs are getting their payments beyond 45 days, let’s say one year, then how can they safeguard themselves from getting into the NPA category? These issues need to be addressed before we talk about digitalisation,” she said.
“Moreover, the rating system is not MSME friendly because for instance, if I take a car loan and its instalment is due then my rating goes bad. This impacts my access to credit. So CIBIL rating should not consider these parameters instead the performance of my business for past years should be considered,” Rama Devi added.
Digital Security for Business
The next session was a masterclass on “Building Cyber Vigilance: Protecting MSMEs from Evolving Threats” by Kalidas TC, Services Specialist, Cyber Security, Dell Technologies.
Explaining the significance of adopting cybersecurity solutions in business, TC said, “Research shows that every 11 seconds there is a company being hacked in the world and data shows that this year there has been a 33 per cent increase in cyberattacks in India from last year.”
“We already have 2071 attacks reported so far to the cyber crime department. Among over 2,000 companies attacked, there are big as well as small enterprises. So, it is a question of when you will be attacked,” he added.
TC said nearly 4,700 small businesses across APJ (Asia Pacific and Japan) are catered by Dell with its cybersecurity solutions. He also touched upon Dell’s desktop products for small businesses called OptiPlex and laptop portfolio Latitude.
Assessing Digital Maturity
Towards the end of the workshop was a standalone session on “Accelerating MSMEs Digital Growth Story Through Vi Business’ ReadyForNext” by Rajeshkumar Sitaraman, VP-Cluster Enterprise Head, South, Vi Business.
Sitaraman highlighted India’s largest MSME digital maturity study by the company for MSMEs to assess their digital understanding. He said MSMEs can also partner with Vi Business for business advice, get industry insights and adopt customised solutions as per their business needs.
Sitaraman added that the digital assessment tool launched in 2022 has so far engaged nearly 1.6 lakh MSMEs across over 16 sectors. Vi Business, particularly for MSMEs, offers a Rs 349 rental plan with 30GB data usage, personal cloud storage space of 50GB, and more.
The workshop concluded with a felicitation ceremony recognising emerging MSMEs of Hyderabad for their contribution to the MSME sector.