Leading SMEs of India 2023

56 | Leading SMEs of India 2023 [ INDIAN SME SECTOR OVERVIEW ] LIMITED R&D ACTIVITIES AND INNOVATION DRIVE The business environment is increasingly becoming more competitive and customer more demanding leading to R&D and innovat ion becoming crucial part for business sustainability. In MSME, barriers related to innovations are linked to market knowledge, technology, funding constraints, as well as shortage of skilled workforce for R&D. LIMITED INTEGRATION WITH GLOBAL ENTERPRISES AlthoughMSMEs contribute ~45% to Indian exports, majority of MSMEs lack export competencies. The inability to effectively diversify has led to lower utilization levels andcountry losinggrounds toother Asian counterparts. Inadequate support in terms of government policies and trade agreements has also proved to be one of the major hurdles for IndianMSMEs for integration with global companies. GROWTH DRIVERS ACCESS TO FINANCE Adequate and t imel y credi t avai labi l i ty at a compet i t ive interest rate is a major growth driver for SMEs. Banks, NBFCs, andMicro Finance Institutions have generally been the institutional sources of finance for MSMEs. Yet, IndianMSMEs have witnessed an institutional funding gap for a long period of time, which has hampered their progress. However, in recent years, various government initiatives under the Aatmanirbhar Bharat Abhiyan aimed at facilitating credit to MSMEs as well as the evolution of Fintech have helped to bridge this gap to a certain extent. The government has introduced various schemes such as Credit Guarantee Scheme and the Emergency Credit Line Guarantee Scheme to strengthen credi t delivery system and augment the flow of credit to the MSME sector. On the other hand, Fintech have addressed the other pain points of Dun & Bradstreet