65% of MSMEs utilise some form of digital tech for daily operations: Survey

MSME (photo:Facebook)


India’s MSME sector is experiencing a significant growth with a notable shift in small business owners’ perspectives towards adopting technology in recent years, a survey said on Wednesday.

PayNearby in a survey revealed that over 65 per cent of Micro, Small, and Medium Enterprises (MSMEs) utilise some form of digital technology for their daily operations. The report also emphasised that 68 per cent of MSMEs acknowledged the growth and beneficial impact of adopting digital technology on both their businesses and personal lives.

The insight was shared as part of a detailed survey titled “MSME Digital Index 2024”, a Pan-India report showcasing technology consumption by MSMEs at the last mile.

When asked about the positive impact of technology on their businesses, 31 per cent indicated that it has enhanced business growth by improving operational efficiency, while 27 per cent reported increased sales and income due to technology adoption. As for the main challenges in using technology for business operations, 36 per cent cited resistance to adopting new technology, and 18 per cent struggled with the high costs associated with its implementation.

Interestingly, 52 per cent favoured English as their preferred language for understanding technology and conducting business transactions, followed by Hindi at 21 per cent.

In the financial services category, UPI at 43 per cent and Aadhaar banking at 38 per cent were the two most popular banking services used by MSMEs at the last mile. Additionally, WhatsApp and WhatsApp Business were collectively the most widely used messaging apps, with a usage rate of 97 per cent.

In its second edition, the report was prepared based on a nationwide survey conducted by the company among more than 10,000 MSMEs in the retail space (kirana stores, mobile recharge stores, medical stores, customer service point (CSPs), travel agents, among others), recording their awareness of and patterns in tech consumption in their professional and personal lives.

According to the survey, 75 per cent of small business owners aged 18-30 were the most digitally adept, with over 87 per cent in this age group using smartphones for daily business operations and accessing digital content. They were closely followed by the age group of 31-40 years.

Notably, 36 per cent of them cited that their monthly income is more than Rs 15,000. The widespread adoption of smartphones highlights the internet’s crucial role in bridging infrastructure gaps and promoting tech inclusion among MSMEs at the grassroots level.

Smartphones emerged as the most popular digital device, preferred by 70 per cent of users. Among the respondents, 68 per cent reported using smartphones for business activities, consuming between 2GB to 5GB of internet daily.

Over 51 per cent of these businesses spend less than Rs 500 per month on internet usage. The Digital India mission and BharatNet initiative have accelerated internet penetration in rural areas, making it affordable and bridging the digital divide.

For internet access at work, approximately 66 per cent used mobile hotspots, followed by Wi-Fi routers at 26 per cent. Ethernet cables and dongles were used by only 5 per cent and 3 per cent, respectively. At home, 75 per cent relied on mobile internet for connectivity.

The use of digital devices was primarily for work purposes, with 36 per cent spending 4-6 hours on their phones.

However, when it came to leisure activities such as social media or online entertainment, the report noted that 66 per cent spent less than 3 hours.

Among apps, YouTube emerged as the most preferred for both social media (41 per cent) and entertainment (72 per cent). Interestingly, 58 per cent of respondents stated that they did not have any gaming apps installed on their phones.