From instant line of credit to flexibility in repayment, here’s what Indian MSMEs want

India's micro, small, and medium enterprises' (MSMEs) top demand is 'Instant Line of Credit', reveals a survey conducted by Kinara Capital.

As per the survey, an ‘Instant Line of Credit’ is the topmost requirement of MSMEs in the financial services category whereas ‘Industry Networking’ tops the chart in the non-financial services category.

55% of the MSMEs want an instant Line of Credit to accelerate everyday business decisions. 15% of the MSMEs have favoured 'Flexible Repayment Product' based on business turnover and 24% of the respondents in the survey have sought help pertaining to industry networking.

Kinara Capital, a fintech platform, conducted the survey with input from 2,600 formal MSMEs that are Udyam-registered and represent the business in Karnataka, Gujarat, Maharashtra, Andhra Pradesh, Telangana, Tamil Nadu, and UT Puducherry.

One out of two surveyed MSMEs want an instant Line of Credit but the non-availability of short-term credit is the biggest hindrance, the report mentioned. As per the survey, over 38% of the MSMEs have claimed that lack of short-term credit has hindered their growth.

Among the varied sectors, manufacturing MSMEs have the strongest demand for instant credit at 60%.

Notably, an instant Line of Credit can simplify routine business decisions for MSMEs that require quick action, such as purchasing raw materials to fulfill a sudden large order, hiring additional employees quickly for a seasonal product run, or renovating business premises.

In the survey, 16% of the MSMEs favoured Flexible Repayment Products that will give them the choice to make Daily/Weekly Loan Payments or Variable Loan Payments, based on their business turnover for the select time period.

A few small businesses in the survey said that networking with their supply chain ecosystem is critical for their growth.

Most of the MSMEs find difficulty in seeking a relevant seller or a buyer. Micro-MSMEs particularly struggle with freight logistics and costs for local goods transport.

Despite India’s growth, there is an acute shortage of truck and delivery drivers in the country. Of the surveyed respondents, 15% said they desired a dedicated 4-wheeler commercial vehicle for their business and 10% would like to own a 2-wheeler vehicle.

Another challenging thing for India's MSMEs is to keep up with quarterly GST and Income tax filings on time.

Therefore business support has emerged as the crucial area where 30% of the surveyed MSMEs want expert guidance on Services such as tax filing, accounting, GST calculation, etc.

21% of MSMEs want to enhance their digital presence via Website Creation, Digital Platform Listings, and Onboarding on Online Trading Platforms. About 15% of MSMEs selected Website Creation and Digital Platform Visibility as their top priority and 6% want support to be listed on MSME Trading portals such as TReDS and GeM.

9% of MSMEs want personal finance support, specifically seeking guidance with insurance and investments.

"Our MSME Sentiment Survey gave MSMEs an opportunity to vocalize their challenges and needs. It is a sign that India’s small business entrepreneurs are now seeking much more than access to formal credit and want tailored products and services aligned with their growth needs," Hardika Shah, Founder & CEO, of Kinara Capital, said.

India's MSME sector contributes 30% to the GDP and nearly 50% to exports, according to the government's data.