The MSME sector in India is on an ambitious growth curve and there has been a progressive change in the mindset of small business owners towards technology adoption in recent years. In a new study, digital financial services network PayNearby said that over 71% of micro, small and medium enterprises (MSMEs) in the retail sector use some form of digital technology for their daily business operations. The report pointed out that more than 80% of MSMEs have acknowledged that adoption of digital technology has had a positive impact on their businesses and personal lives.
The insights were shared as part of a detailed survey – MSME Digital Index 2023 – a pan-India report showcasing technology consumption by MSMEs at the last mile. The report was prepared on the basis of a nationwide survey conducted by the company among 5,000+ MSMEs in the retail sector (kirana stores, mobile recharge stores, medical stores, customer service points (CSPs), travel agents, among others), In which their technology awareness was recorded and technology consumption pattern in their professional and personal life.
According to the survey, small business owners in the age group of 18-30 years were the most digitally proficient, with over 75% of this age group owning a smartphone to run their daily business operations and access digital content. This. This was immediately followed by the 31–40 age group. Notably, 32% of them said that their monthly income is more than Rs 15,000.
In the Financial Services category, Aadhaar Banking and UPI were the two most popular banking services availed by MSMEs till the last mile. Additionally, WhatsApp and WhatsApp Business were, cumulatively, the most widely used messaging apps with 97% usage.
Smartphone usage underlines the critical role played by the internet, which helps bridge the infrastructure gap and last-mile tech inclusion by onboarding MSMEs on the digital bandwagon.
Among all digital devices, smartphones were cited as the most popular category, with 68% of users claiming them as their most preferred choice.
66% MSMEs claimed to be using smartphones for business activities while consuming 2GB -5GB of internet a day. More than 52% of these small businesses spend less than Rs 500 per month on internet consumption.
In terms of internet connectivity, about 55% said they use a mobile hotspot to connect to the internet at work. This was followed by Wi-Fi routers at 30%. The use cases for Ethernet cables and dongles were 10% and 5%, respectively. 73% used mobile internet to connect to the internet in their homes.
Anand Kumar Bajaj, MD & CEO, PayNearby said, “With the help of smartphones, internet and fintech, MSMEs are increasingly adopting technology till the last mile. However, this is only the beginning. We need to create a strong ecosystem where not only access to technology is made cheap and easy but also an infrastructure is provided where people can be skilled and their technical constraints and apprehensions are addressed appropriately Can go For this, the technology needs to be factor agnostic, easy to use, easy to manage and easy to scale.
The use of digital devices was mainly for work purposes, with 32% spending 4-6 hours a day on their phones. However, when it comes to leisure activities such as social media or online entertainment, the report states that 60% were spending less than 3 hours a day.
Among social media apps, Facebook took the top spot with 27% and YouTube was the most preferred entertainment app with 47% usage. 57% of the respondents said that they do not have any kind of gaming app installed on their phones.
The report further states that a majority of all tech-savvy MSMEs use accounting software at 25%, followed by POS software and Customer Relationship Management (CRM) software at 20% and 17%, respectively, to manage their business operations.
When asked about the purpose of using digital devices, 25% used them for account keeping and payment acceptance, while 20% said technology was used to process transactions.
When asked about the positive impact of technology on their businesses, 32% said it has helped them grow their business by improving efficiency in business operations and 28% said they have increased their sales and income with technology. growth is seen.
When it comes to the main challenges faced in using technology for business operations, 30% said they cannot afford the high cost of technology, and 29% grapple with poor internet connectivity. Notably, 65% chose English as their preferred language to understand technology and conduct business transactions, followed by Hindi at 24%.