News around you

96 pc of MSMEs expect profits to rise in 2023

Kolkata: Ninety-six per cent of MSMEs expect profits to increase in 2023, an MSME Business Confidence Study released today by NeoGrowth, an MSME-focused digital lender in India, indicates.
The MSME Business Confidence Study was conducted nationwide with responses from close to 3,000 MSME owners. The study covered the expectations of India’s MSME owners across 25+ cities and 70+ business segments, as they step into 2023 amidst global volatility.
Arun Nayyar, Managing Director and CEO, NeoGrowth, said, “It is heartening that MSMEs are confident about their growth, profitability and other business indicator. We believe that the strong digital ecosystem in India will be a catalyst for MSME lending in the coming year. MSMEs are capitalizing on new credit options to build and scale their businesses easily, unimpeded by traditional methods of credit underwriting. 2023 will be a crucial year for MSMEs, which will play a pivotal role as India moves a step closer to realising its vision of a $5-trillion economy.”
The optimism among MSMEs, India’s economic backbone, is an encouraging sign in these uncertain times. Three out of four MSMEs, who were a part of the study, were confident of economic growth in 2023, 20 per cent were neutral and only 5 per cent were negative. Among the respondents, 80 per cent of women MSMEs from the manufacturing and services sector said they were optimistic about India’s economic growth.
Seventy-five per cent of MSME owners expected an increase in consumer demand in 2023, 21 per cent of MSME owners felt it would remain the same and only 4 per cent of MSME owners anticipated that it would decrease. MSMEs from Chennai recorded the highest optimism with around 86 per cent expecting growth, followed by 83 per cent in Hyderabad and 81 per cent in Mumbai.
In terms of industry segment, MSME owners in the retail and trading segment said they were positive about witnessing a strong consumer demand in 2023. Women-led MSMEs from the trading and wholesale industry anticipated a healthy consumer demand in the coming year compared to other respondents.
Ninety-six per cent of MSMEs expected their profits to increase in 2023; out of these, 66 per cent anticipated profits to rise by over 30 per cent while 30 per cent of MSMEs felt that it would increase by less than 30 per cent. Only 4 per cent of MSMEs expected business profitability to decrease.
MSMEs in Chennai were most confident about profitability in 2023 with 80 per cent expecting an over 30 per cent increase in profits. In contrast, the profit expectations of MSME owners in Mumbai and Pune were more conservative.
Eighty-four per cent of MSMEs in non-metros, largely bucketed under ‘others’ in the study, said they planned to opt for business loans in 2023. The accelerated demand for credit from smaller cities signaled MSMEs’ business recovery, as they require funds for their working capital needs, growth and expansion.
The manufacturing and services industry segments anticipated higher credit demand. Over 80 per cent of women MSME owners are expected to opt for a business loan in 2023. Given the expectations of strong consumer demand, the repo rate increases by 225 basis points since early 2022 was unlikely to impact the MSME credit demand in 2023.
Sixty per cent of MSME owners said they planned to step up technology or digital investments in 2023. The willingness for digital adoption was clearly evident with 38 per cent of MSMEs saying they would focus on online selling, 23 per cent planning to build a social media presence, and 24 per cent of MSMEs desiring to digitise their accounts and payments to track cash flows in 2023.
Sixty-one per cent MSME owners said they intended to expand their workforce in 2023 with higher hiring expected in the services and manufacturing industry segments. Three out of four Chennai-based MSMEs planned to hire more employees in 2023, the highest in the country.
Seventy-one per cent of MSME owners hoped to include Sustainable Business Practices in 2023. The topmost sustainable business practice favored by MSMEs was to eliminate plastic usage. Sustainable business practices include initiatives around energy conservation/ renewable energy, tree plantation, reducing carbon emissions, reducing plastic and paper usage & controlling/ reducing air/ water pollution. (UNI)

You might also like
Leave A Reply

Your email address will not be published.