FUELLING THE FUTURE

As India eyes a $5 trillion economy, SMEs—backed by digital innovation and diverse financing models—are emerging as the backbone of inclusive economic growth.

- By Team ET Now Machinist

With nearly 90% of global businesses falling under the SME category, their contribution ranges from 40% of GDP in developing nations to 60% in developed ones. In India, while SMEs form the majority with 40 million enterprises, their GDP share remains at 30%, pointing to a massive untapped potential.

The next leap—from 30% to 50%—will rely on improved access to finance and the adoption of digital tools. With government support and an evolving fintech landscape, new-age solutions are bridging gaps in credit access and operational agility.

A panel discussion titled "Financing and Modernisation of SMEs' was organised at the Festival of Manufacturing in Mumbai, which brought together seasoned entrepreneurs and fintech experts to share their perspectives on how SMEs can power India's transformation.

The panel comprised of experts like Probir Roy, Senior Advisor, WASME and Co-Founder PayMate, Smriti Ram, CEO, Sanmour, Rujuta Prakash Jagtap, Executive Director, SAJ Test Plant, Pankti Agarwal, Executive Director, Laser Technologies, and Pugal T the founder of Potential Solutions. It was moderated by Alok Kumbhat, Director of Data and Strategy at Dun & Bradstreet India.

"MSMEs are often spoken of as the backbone of India's economy — and for good reason. They power a large part of our exports, create millions of jobs, and are vital to India's economic fabric. Yet, despite years of discussion, their biggest pain point — access to credit — remains largely unresolved." said Prabir Roy.

He pointed out that while several schemes have been launched in recent years to improve financial inclusion, most small businesses still struggle to secure loans through formal channels.