90% MSMEs are confident that India’s economy will be resilient or will further improve in 2024, creating an enabling environment to conduct business, a recent study has revealed.
Further, supported by government initiatives to enhance ease of doing business and a strong consumer demand, 91% expect their profits to increase in 2024.
The second edition of the NeoInsights study – ‘MSME Business Confidence Study’ for the year 2024, highlighted that MSMEs in the wholesale/trading sector are leading the charge on economic optimism, with a resounding 95% expressing confidence in India’s robust growth trajectory for 2024.
Retail MSMEs are very optimistic as 94% of MSME retailers expect an increase in profits in 2024. Also, 58% of MSMEs in the Trading/Wholesale segment expect their profits to increase by over 30%.
Projections for 2024:
The report has highlighted that the consumer demand is set to surge in 2024 with 75% of Wholesale and Trader segment MSMEs remain bullish on consumer demand in 2024, echoing the optimism expressed in 2023.
Delhi is most optimistic where a whopping 87% of surveyed MSMEs anticipate a surge in consumer spending. Bangalore and Pune follow suit with impressive levels of confidence, it said.
The report highlighted the top three factors for consideration while choosing a loan provider in 2024. These factors are: quick disbursals, digitally enabled loan journey, and deal terms.
The highest number of MSMEs in Delhi would choose a lender with a digital loan process, whereas MSMEs in Pune prefer loan providers with fast approvals and disbursals.
In 2024, the expansion spree is expected with nearly 60% of MSMEs plan to open new stores and offer new products or services to their customers in 2024.
MSMEs in Bangalore, Delhi, and Pune have shown willingness to expand their presence in 2024. The highest number of MSMEs in the Wholesale/ Trading sector expects business and store expansion in 2024.
Positive hiring sentiments, Eco-friendly approach
According to the report, 44% of MSMEs plan to hire more employees in 2024 with maximum hiring expected by MSMEs in Bangalore and Pune.
Some of the focus areas for MSMEs while hiring in 2024 would be creating job opportunities for people with disabilities/ special needs, hiring from smaller towns, and increased share of women in their workforce.
Another interesting trend highlighted by the report is towards the adoption of sustainable and eco-friendly practices by the MSMEs. It said 81% of MSMEs plan to adopt sustainable and eco-friendly practices in 2024.
Similar to 2023, MSMEs have rated ‘going plastic-free’ as a key environment-friendly initiative of their business for 2024. In recent times, there has been a notable shift towards sustainability awareness and proactive measures to safeguard the planet.
Also, the Indian MSMEs are gearing up for a digital revolution, with 82% planning to harness the power of online tools.
This focus goes beyond just “going digital” and delves into five key areas: digital discovery (online selling), digital fulfilment (delivery partnerships and online marketplaces), digital transactions (cashless payments), digital operations (streamlining tasks like bookkeeping and ordering), and digital engagement (through google, social media and customer feedback).
Recap of 2023:
The repot mentioned that 96% MSME owners expected their profits to increase in 2023 and 75% were optimistic of India’s economy to conduct business.
In this survey conducted for the MSME Business Confidence Study 2024, despite the volatile global environment, 3 in 5 MSMEs mentioned that they have met their 2023 business targets with nearly 80% of women-led MSMEs achieved their business targets set for 2023.
Over 40% of MSMEs across India experienced a major boost in 2023 with the support of diverse government schemes tailored to their needs. Notably, the manufacturing and wholesale/trade sectors emerged as the biggest beneficiaries, reaping significant benefits from these initiatives, the report highlighted.
Delhi-based MSMEs availed the benefits from government schemes the most, followed by MSMEs from Pune and Hyderabad.
Arun Nayyar, Managing Director and CEO of NeoGrowth said, “Similar to 2023, MSMEs have continued to radiate optimism in India’s business environment. From steady growth in profits to expansion plans, their confidence portrays a vibrant picture of prospects for the country’s economic growth in 2024.”
“India’s small businesses will continue to take center-stage in India’s growth story, and we are thrilled to be part of their journey by providing them timely credit to meet their evolving business needs,” he added.
