Only 5% MSMEs have fully embraced digital technologies: Yes Bank Report
New Delhi, Jan 23 (KNN) In a bid to examine the digitization's influence on Indian Micro Small and Medium Enterprises (MSMEs), India’s fourth largest private sector Bank, YES BANK carried an in-depth 5-month survey reaching over 2,700 MSMEs across 20 industries from all over the country and found that only five per cent MSMEs have fully embraced digital technologies.
This was the first extensive survey of its kind titled ‘Impact of Digitization on MSMEs’, which recognises key drivers for digital adoption by MSMEs, as well as bars & prescribed measures for higher adoption of digital tech.
According to the survey, “While over 60 per cent of MSME respondents is digital users, only five per cent have fully embraced digital technologies.”
Even though over 50 percent of the digitally-enabled MSMEs highlighted several benefits (increase in profitability, operational efficiency and improved customer engagement), lack of know-how and skilled manpower emerged as key barriers for wider digital adoption.
The study underscores the need for government, banks, technology providers and corporates to work together for digitally empowering MSMEs, and hence resulting in increased revenues, lower risks, reduced costs and diversified market segments in the sector.
Articulating about the report, Sumit Gupta, Senior Group President – Mid Segment, Multinational Corporate Banking, Government Banking, Agri-Business & Knowledge, YES BANK said, “The macro business environment that MSMEs are operating under is undergoing a transition. Digitisation is becoming increasingly vital for long term survival and future growth.”
The need of the hour is for MSMEs to take the lead and make digitalisation an integral part of their business strategies, he added.
He said “I strongly believe that the YES BANK study on Impact of Digitisation on MSMEs in India will go a long way in enabling the MSME sector to realise the true potential of digitization. Entrepreneurs who are successful in understanding the power of digitization and harnessing it across their value chain will lead this new wave of inclusive and sustainable growth.”
To bring together all stakeholders, with the shared intention of assuring that digital penetration within the sector is quickened and watched on a regular basis, the study will be presented to key stakeholders including the Government, technology and other industry leaders, regulators, MSMEs and academia, Yes Bank said in a release.
To give greater impetus to MSME entrepreneurs and business owners, and stimulate the wave of digitization in the sector, it's important that existing strategic initiatives like ‘Digital India’, ‘Skill India’ & ‘Startup India’ are adequately leveraged, it added.