How digital technology has redefined MSME sector

As the steady rising day temperatures call out the ending of the winter season, Pradeep Kumar is on his way to start another busy day. As a retailer of consumer camera equipment, he has established a good presence both on ecommerce platforms (that is responsible for about 30% of his sales) in addition to his small store in Delhi’s Lajpat Rai market. He is expecting a big surge in sales as the school holiday season is expected to start driving up demand for cameras and associated ancillary produproducts. He needs to stock up on inventory and needs about Rs 10 lakhs urgently to secure his supplies from the distributor.

Till last year, this meant doing the rounds to a few known lenders and spending at least 2-3 days doing the paperwork without knowing for sure when and how much he would be able to borrow. However, today, the balance has shifted in his favour as he has a choice of lenders to choose from, and a clear visibility of how much he can borrow at any given time. The best part is that he does not have to leave his shop -- and as a bonus, the actual funds are available to him in almost real time.

At almost, the exact same time, Sushila Chanu, a beauty salon owner in Imphal, is constantly struggling with the need to maintain her popular outlet with the latest trends in the fashion industry. She operates in what is mainly a cash-dominated economy and most of her interactions with her customers as well as with her suppliers have so far mostly been in cash. She is looking up to redo the interiors of her salon and also invest in some of the latest styling products. She estimates that she need .. about Rs 4 lakhs to undertake this. She has learnt from her sources that there are many willing lenders, but she will have to take out the time to submit paperwork, do the necessary follow up and hope that her loan application is approved. The other alternative is the local money lender, but the interest rates deter her from taking that option.