Unlocking Online Market Place For SME’s In Rural India

Indian Small and Medium Enterprises (SMEs) are extremely affected by the continued Coronavirus pandemic, particularly after the lethal second wave. However, it nonetheless holds the ability and functionality to play an essential position within the improvement of the Indian economic system, significantly in rural areas. 

According to the World Bank estimates, SMEs signify about 90 per cent of companies and greater than 50 per cent of employment worldwide.  

Sanjeev Kumar, Chief Executive Officer (CEO) Spice Money stated, “MSMEs are one of the strongest pillars in driving growth for India’s economy. There are more than 63 million MSMEs in India providing employment to almost 100 million people residing in remote areas.” 

After the digital revolution in India with Prime Minister Narendra Modi‘s ‘Digital India,’ MSMEs in rural areas can leverage an internet market for enterprise progress, which may additional enhance, rural economic system.

While speaking about leveraging on-line market, Kumar stated, “Leveraging online marketplace has become a necessity for MSMEs to ensure that their products reach customers living in far-flung areas of the country. The increased penetration of mobile and internet connections in rural and semi-urban areas has enabled customers to buy products online simply with a click on their smartphones. Its potential was clearly visible during the pandemic induced lockdown when the purchase on e-commerce websites grew at an exponential rate.”

Formal SMEs contribute as much as 40 per cent of nationwide revenue (Gross Domestic Product, GDP) in growing economies. If World Bank’s estimates are to be believed, 600 million jobs shall be required by 2030 to soak up the rising international workforce, which makes SME improvement a excessive precedence for a lot of governments world wide.

“The online marketplace model can also help MSMEs to increase exports of the products manufactured by them across the world. Even with the existing benefits of the online marketplace model, very few MSMEs are selling and exporting their products online owing to the lack of digital skills and the scepticism to adopt newer business models. A majority of companies refrain from sharing data with the online marketplace. Along with this, lack of transparency in dispute resolution processes further stands as a challenge for the adoption of online marketplace models amongst MSMEs,” Kumar stated.

Apart from highway connectivity, rural India additionally must have digital connectivity, by which they’ll broaden their companies. As per the World Bank, India had 20.95 ATMs per 100,000 adults as of 2019, very low when in comparison with different international locations. While over 65 per cent of the Indian inhabitants resides in rural India, rural areas account for under 20 % of all ATMs in India. 

“Strategic partnerships between the government and fintech players, especially those focussing on rural areas, can help in coping with these challenges. Additionally, it is crucial to set up training programs for the MSME sector to bridge the existing gap. Some countries have already introduced policies encouraging small firms to use online platforms and we should also take necessary actions to accelerate the process. The initial results may be limited but it will help in increasing the growth potential for the sector in the long run,” Kumar stated.

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