Micro, small enterprises enhanced their digital adoption post Covid to market products, transact online: Crisil

Technology for MSMEs: Among sectors, manufacturing reported higher adoption with 71 per cent respondents adopting or upgrading their use of digital platforms in comparison to 66 per cent respondents in the services sector.

technology for msmes
Around 80 per cent respondents were still hesitant to share their financial data online due to fear of data theft. (Image: pixabay)

Technology for MSMEs: Over 65 per cent of around 540 micro and small enterprises (MSEs) surveyed by Crisil recently said they had adopted or upgraded their use of digital channels for growth amid pandemic-led disruption last year. The ratings agency on Wednesday said the survey was conducted to gauge usage of digital channels including online aggregators, social media platforms, and company websites by MSEs during the pandemic. Of the total respondents, 59 per cent were micro enterprises with revenue less than Rs 5 crore and others were small businesses with revenue up to Rs 25 crore.

The digital usage benefitted respondents in the immediate-to-short run by helping manage transactions at a distance, deliver goods efficiently, and facilitate access to financial services, apart from bringing in tangible benefits such as enhanced customer acquisition, operational efficiency, workforce enhancement, risk management, innovation and reduction in manpower requirement, the survey noted.

Among sectors, manufacturing reported higher adoption with 71 per cent respondents adopting or upgrading their use of digital platforms in comparison to 66 per cent respondents in the services sector. In terms of marketing or selling products and services, around 52 per cent respondents said they use social media platforms.

“The growing demand for digitalization in operation was visible across segments. The highest transformation was recorded on financial transactions with around 68 per cent extensively adopting payment wallets and net banking, while a mere around 4 per cent were focused on procurement or inventory management,” said Bhushan Parekh, Director, SME Solutions, Crisil. 

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However, around 80 per cent respondents were still hesitant to share their financial data online due to fear of data theft.

“The digital acceptance has increased further after the second wave. The survey highlight was the big change in the digitsation of financial transactions and marketing. However, MSEs were still not comfortable sharing their proprietary data online. In our experience, whatever digital footprint has been created is usually in cases where data sharing is not consent-based and that is helping MSEs with benefit maximum otherwise if their consent is needed, there are challenges in getting the data,” Manasi Kulkarni, Associate Director, Crisil told Financial Express Online.

Meanwhile, the MSME sector is likely to see a 15-17 per cent growth in revenues in FY22 on the back of demand recovery with economic activity reviving, a study by Assocham-Crisil had said recently. The FY22 recovery followed a negative growth of around 10 per cent in FY21 and 6 per cent in FY20. For FY23, the study estimated 11-13 per cent growth for the sector. In terms of credit availability, around 7-9 per cent growth was expected in FY22 to Rs 18 lakh crore from Rs 17 lakh crore in FY21 and Rs 16 lakh crore during pre-Covid FY20, according to the study titled MSMEs Back to the Grind.

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