In times of pandemic, the big question that dominated is the growth of the MSME sector. The employment opportunity and GDP growth go hand in hand. MSME sector employs people below the poverty line and encourages the spirit of entrepreneurship. Technology and auditing professionals support the development of the MSME sector. After agriculture, the MSME industry is the big industry.
MSME day is celebrated on June 27. On April 6, 2017, the UN general assembly declared that June 27 is the MSME day. MSME contribute to the growth of multiple sectors and talents. Resilience and rebuilding is the theme of world MSME day 2022. UN planned to organise the event online, offline and hybrid. The objectives of the event go to create awareness, of challenges faced by the policymakers in the MSME industry, focusing on women, youth, refugees and migrants, create the space for recommendations, practical tools, and actions, and frame targeted policies. The aim of MSME day 2022 is to develop the MSME sector and social enterprises. This improves the weaker sections. As a celebration of MSME day, the blog revolves around the growth of MSME and the contribution of finance professionals to the MSME industry.
Role of technology:
The food and beverages industry has faced problems during the pandemic period. Now, it is regaining profitability. Almost 10 per cent of the MSME sector will believe in technology for payment. India is a consumption-based economy. Here the money circulates as per consumption. It creates employment opportunities for the weaker section of people. There is a necessity for R&D, and digital infrastructure to use technology effectively. Digital payments will reduce the workload of the banks. The sale of local and international customers through e-commerce is the best way to manage the challenges posed by the pandemic.
Ease of doing business:
Export plays a primary role in foreign direct investment. India has trade complementarities with foreign countries like UAE, EU and UK. India has the production capacity and manpower. It supports the goal of becoming an export hub.
Quality of production:
The TReDS is the electronic platform that was launched by NSE and SIDBI. Green technologies are the best way to balance technology and the environment. Eco-friendly technologies empower the environment. The manufacturing sector needs to focus on the consumption of fossil fuels and non-renewable resources. The concept of making in India, green technologies and zero defects and zero effect improve the quality standards in the MSME industry. Corporate buyers doing manufacturing buy the raw materials from the MSME industry. The government had set up the TReDS for discounting the bills from MSME producers. The TReds platform has three types of participants: buyer, supplier and financier. It works based on bid and discounted invoice amounts.
Capital raising is possible through the stock market BSE and NSE. Both the markets have regulated the listings of MSME companies from the unorganised sector to the organised sector. MSME stocks participate in the MSME IPO with a capital of one crore or 25 crores. If the listing of the company is not in the MSME segment, the company should have a track record of three years. If the age of the company is not three years, then it should be backed by the funding of state government, central government or financial institutions. On March 13, 2012, the SME exchange started in India. This platform is raising 6,600 crores of the fund. BSE has 340 MSME companies, and NSE has 200 MSME companies. Out of these companies, 106 companies have raised sufficient funds and moved to the main board exchange.
Trade credit Insurance:
Trade credit insurance mitigates the risk against goods and services non-payment by the buyers. The trade risks and accessibility to a new market are possible with trade credit insurance. The general insurance companies also offer trade credit insurance with the guidelines. The trade losses and bankruptcy processes are reduced with trade credit insurance. If the company is planning for a new geographic market, the payment gateway increases the buyer numbers. The process of TCI makes the business comfortable with extended credit terms to the buyers.
Chartered accountants and cost accountants support MSME:
Chartered accountants and cost accountants help with asset management, budgetary forecasts, preparing standards, financial modelling, project financing, and working capital management. MSME mentorship program will help to stabilise the MSME sector with the intelligence of the professionals. Working capital decisions, new investment decisions, and making or by decisions are the crucial part of the growth of the SME industry. The post-disaster risks and disaster management educate the MSME sector. Chartered accountants and cost accountants collect the information and help with the crucial action planning. The following points emphasize the need for professional guidance in the MSME sector:
• MSMEs are facing difficulty in managing their digital assets. Big corporations use strategies to manage their digital assets.
• The MSME industry needs simplification of tax and access to capital funds with ease. This will help the equity participation of the MSME sector.
• Zero defect and zero effect is the ZED scheme that helps for the quality management of small-scale industries.
• MSME sector avail project loans with four types of major projects. The four types of projects are manufacturing projects, research projects, construction projects, and management projects.
• Banks help the MSME sector to get the project loan for a new and existing businesses.
The contribution of professionals, technology and government schemes to the MSME sector maintains sustainability. The 2022 MSME event focus on the purpose-driven goals of social, and MSME enterprises. MSME sector is at the centre of the growth. It enhances the systematic development of the economy.