Celebrating Resilient MSMEs: International MSME Day 2024

On International MSME Day 2024, we celebrate the remarkable contributions of Micro, Small, and Medium-sized Enterprises (MSMEs) and explore how their power and resilience can accelerate sustainable development and eradicate poverty amidst ongoing global crises. This year’s theme, “Leveraging the Power and Resilience of Micro-, Small and Medium-sized Enterprises (MSMEs) to Accelerate Sustainable Development and Eradicate Poverty in Times of Multiple Crises,” highlights the critical role MSMEs play in achieving a better and more sustainable future for all.

MSMEs are indispensable to the economic fabric of both developed and developing nations. They account for about 90% of businesses worldwide, provide employment for over 70% of the global workforce, and contribute approximately 50% to the global GDP. These enterprises are crucial for fostering innovation, generating employment, and ensuring equitable economic development. In developing countries like India, MSMEs play an even more pivotal role. They contribute nearly 30% to the nation’s GDP, around 45% to manufacturing output, and are the second-largest employer after agriculture. As of June 26, 2024, India boasts 4.62 crore registered MSMEs, which employ more than 20 crore individuals. This sector embodies the aspirations and entrepreneurial spirit of millions of individuals striving to make a difference. Despite their significant contributions, MSMEs face numerous challenges that hinder their growth and sustainability. These challenges are exacerbated by global crises such as economic downturns, pandemics, and climate change. Some of the most pressing issues include access to finance, market access, technological adoption, regulatory burdens, and the need for skills and training. MSMEs often struggle to secure financing due to perceived high risk, lack of collateral, and inadequate credit history, limiting their ability to invest in technology, expand operations, and innovate. Many MSMEs find it challenging to penetrate large markets due to limited resources and lack of awareness about available opportunities. The lack of access to advanced technologies hampers the productivity and efficiency of MSMEs, making it difficult for them to compete with larger enterprises. Additionally, complex and onerous regulatory environments can stifle MSME growth and discourage entrepreneurship. Finally, MSMEs often lack the necessary skills and training to succeed, and they may not have the resources to provide adequate training to their employees. The United Nations’ Sustainable Development Goals (SDGs) provide a blueprint for achieving a better and more sustainable future for all. MSMEs have a vital role to play in this agenda, particularly in the context of economic growth, innovation and infrastructure, reducing inequality, and environmental sustainability. By creating jobs and fostering economic activity, MSMEs contribute to sustained and inclusive economic growth. They drive innovation, which is essential for building resilient infrastructure and promoting sustainable industrialization. By providing employment and entrepreneurial opportunities, MSMEs help reduce income inequality and promote social inclusion. Moreover, MSMEs can adopt sustainable practices that reduce environmental impact and contribute to the fight against climate change. To harness the full potential of MSMEs in driving sustainable development amidst global crises, it is imperative to address the challenges they face and create an enabling environment for their growth. Improving access to finance is crucial for the growth and sustainability of MSMEs. Governments, financial institutions, and international organizations can collaborate to develop tailored financial products that meet the unique needs of MSMEs. This includes credit guarantee schemes, microfinance, and peer-to-peer lending, and financial literacy programs. In India, the Udyam Registration Portal and initiatives like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) are steps in the right direction. However, more needs to be done to ensure that even the smallest enterprises can access the financing they need.

To fully leverage the power and resilience of MSMEs for sustainable development, a multi-faceted approach is required. This involves coordinated efforts from governments, financial institutions, the private sector, and international organizations. Strengthening public-private partnerships can drive innovation, provide funding, and offer technical assistance to MSMEs. Encouraging innovation and research by investing in research and development (R&D) is crucial for MSME growth. Integrating MSMEs into global value chains can provide them with access to larger markets, advanced technologies, and best practices. International MSME Day 2024, June 27, is a significant occasion to recognize the invaluable contributions of MSMEs to the global economy and to emphasize their role in sustainable development amidst global crises. By addressing the challenges faced by MSMEs and creating an enabling environment for their growth, we can harness their power and resilience to drive economic stability, innovation, and inclusive growth. India’s MSME sector, with its vast potential and entrepreneurial spirit, is well-positioned to lead this transformation. Through concerted efforts from all stakeholders, we can ensure that MSMEs continue to be the backbone of the economy, fostering sustainable development and resilience in the face of future challenges.

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