As the sector grapples with debt and delayed payments, Indian micro, small, and medium enterprises (MSMEs) have seen a 68% growth in business after adopting digital technology, according to the ‘MSME Digital Index 2024’ survey released by PayNearby.

The survey revealed that 43% of MSMEs prefer UPI and 38% prefer Aadhaar Banking for last-mile banking services. The report highlighted that 68% of MSMEs acknowledged the positive impact of digital technology on their businesses and personal lives.

In recent years, the MSME sector in India has experienced significant growth through technology adoption. The PayNearby report noted that over 65% of MSMEs now utilize some form of digital technology in their daily operations.

“The MSME sector is pivotal to our economy, and their adoption of digital technologies is crucial for India’s growth. The MSME Digital Index 2024 showcases significant progress in technology adoption while highlighting persistent challenges. We believe that MSMEs should be supported in their digital transformation journey and ensure that technology’s benefits reach every corner,” said Anand Kumar Bajaj, Founder, MD, and CEO of PayNearby.

Bajaj added that by leveraging artificial intelligence (AI), augmented reality (AR), and machine learning (ML), MSMEs in rural India can thrive in a digital-first economy. An inclusive ecosystem that enhances skills and removes barriers is essential for all businesses to embrace digitalization, driving economic growth and social upliftment in the real Bharat.

The report also noted that 31% of MSMEs have seen enhanced business growth through improved operational efficiency, and 27% reported increased sales and income due to technology adoption. However, 36% cited resistance to adopting new technology, and 18% struggled with the high costs of implementation as the main challenges.

WhatsApp and WhatsApp Business were the most widely used messaging apps, with a usage rate of 97%. The survey indicated that 75% of small business owners aged 18-30 were the most digitally adept, closely followed by those aged 31-40.

Also Read | Why digital adoption of MSMEs is critical?

Smartphones were preferred by 70% of users, highlighting the internet’s crucial role in bridging infrastructure gaps and promoting tech inclusion among MSMEs at the grassroots level. The Digital India mission and BharatNet initiative have accelerated internet penetration in rural areas, making it affordable and bridging the digital divide.

The report stated that among all tech-savvy MSMEs, 29% used accounting software, followed by POS software and Customer Relationship Management (CRM) software at 17% and 14% respectively, to manage their business operations. Meanwhile, 6% relied on manual methods, underscoring the necessity of fostering a thriving tech ecosystem to empower MSMEs.

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