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Micro-lending unlocks potential of India’s hidden entrepreneurs

The micro, small, and medium enterprise (MSME) sector has often been hailed as the backbone of India’s economy, driving innovation, fostering employment, and contributing significantly to the gross domestic product (GDP) growth. Yet, beneath this celebrated narrative lies the sector’s perpetual struggle for financial support. With micro-lending emerging as a critical tool to bridge this gap, a series of regulatory shifts and strategic advancements are reshaping the sector, steering it towards resilience and sustainability. This challenge was discussed at a CareEdge webinar titled ‘Exploring MSME Growth and the Evolving Micro LAP Landscape’.

A new regulatory era

The MSME financing landscape has undergone a seismic shift with the introduction of a stricter 90-day default norm, replacing the earlier 180-day standard. While this move aligns with global practices, it has ushered in significant changes for lenders, who now face the dual challenge of adapting to regulatory compliance and ensuring financial accessibility for small enterprises. This transition demands precision and innovation, particularly as many MSMEs operate with unpredictable cash flows.

One transformative solution has been the adoption of digital tools to assess cash flow patterns, enabling lenders to accurately gauge the financial health of these businesses. For example, advanced algorithms now analyse transaction histories and supply chain activities, offering a more comprehensive picture of creditworthiness. These digital advances have proved invaluable in addressing the sector’s hallmark challenge — a lack of formal financial records.

Moreover, lenders are crafting empathetic and tailored recovery models to mitigate the stress of rigid compliance. Personalised solutions, such as phased repayment plans, help strike a delicate balance between meeting regulatory demands and supporting MSMEs through their unique financial journeys. The successful alignment with the 90-day norm highlights the sector’s ability to adapt, yet it serves as a reminder of the vigilance required to maintain momentum.

Profitability in a competitive landscape

For lenders, staying profitable in an increasingly competitive environment is no easy feat. The MSME sector, however, offers untapped potential that can be a game-changer. Recent industry reports reveal that only a fraction of India’s estimated 63 million MSMEs currently have access to formal credit channels, leaving vast opportunities for financial institutions to explore.

The key lies in understanding the complexities of MSME financing. Addressing higher credit costs, for instance, requires nuanced pricing strategies that ensure fairness without compromising margins. A case in point is the willingness of borrowers to absorb moderate interest rate increases — data suggests that even a 3% hike has had minimal impact on demand, allowing lenders to maintain profitability while passing on costs.

Customer-centric execution has also emerged as a vital strategy. By tailoring services to the specific needs of micro-enterprises, lenders are not only fostering loyalty but also creating a competitive edge. For example, non-banking financial companies (NBFCs) offering flexible collateral options have gained significant traction among MSMEs, reinforcing the importance of adaptability in service delivery.

As funding costs show signs of easing, the future holds promising opportunities for higher margins. However, long-term success hinges on a deeper understanding of the sector’s intricacies and a commitment to innovation.

The role of technology in monitoring and growth

Technology has been a powerful enabler in redefining micro-lending. The deployment of account aggregator systems, for instance, has provided lenders with unparalleled visibility into borrowers’ financial transactions. These platforms streamline the end-use monitoring of loans, ensuring greater transparency and accountability.

Yet, challenges remain. While account aggregators simplify access to bank statements, the fungibility of money often obscures the precise utilisation of loan funds. To address this, lenders are continuously enhancing their systems, incorporating machine learning and blockchain technology to improve accuracy and traceability.

Take the example of fintech start-ups partnering with traditional banks to develop blockchain-based loan tracking systems. These collaborations are not only meeting regulatory requirements but are also setting new standards in responsible lending practices. Such innovations highlight the symbiotic relationship between technology and traditional approaches, paving the way for a more robust financial ecosystem.

Harnessing the promise of MSMEs

The MSME sector stands as a beacon of resilience and untapped potential. By embracing regulatory changes, leveraging technology, and addressing the unique challenges faced by micro-enterprises, stakeholders can unlock new avenues for growth and transformation.

For those at the forefront of micro-lending, the message is clear: dive deeper, innovate boldly, and stay attuned to the needs of this vibrant sector. With countless opportunities awaiting exploration, the story of MSMEs is one of determination, dynamism, and an unwavering drive to succeed.

Sector Overview

As of 4 February 2025, the Udyam Portal boasts 5,93,38,604 registered MSMEs, with the vast majority classified as micro-enterprises. Beyond their economic contributions, these MSMEs have created substantial employment opportunities, providing jobs to more than 25.18 crore individuals.

During the financial year 2023-24, the Prime Minister’s Employment Generation Programme (PMEGP) supported 89,118 enterprises, fostering entrepreneurship across various sectors. The scheme disbursed ₹3,093.87 crore as margin money subsidy, helping small businesses scale operations and sustain growth. Consequently, an estimated 7,12,944 employment opportunities were created, reaffirming PMEGP’s role in bolstering self-employment and job creation nationwide.

Contribution to gross domestic product: The MSME sector contributes approximately 30% to India’s gross domestic product, with micro-enterprises accounting for 97% of the total share.

Credit access: Despite their significance, only 2.5 crore MSMEs out of 63.4 million units have accessed formal credit channels. This highlights the untapped potential for micro-lending.

Women entrepreneurs: Women-owned MSMEs make up 38% of registered enterprises, reflecting the growing role of women in this sector.

Export contribution: MSMEs contribute around 45.79% in 2024-25 (up to May 2024) of India’s total exports, showcasing their importance in global trade.

(Write to us at editorial@bombaychamber.com)

Empowerment can help women seafarers navigate their careers with dignity and pride: Capt. Aakriti Barthwal

In August 2005, nine girls enrolled with the Maritime Training Institute, The Shipping Corporation of India (SCI), with the dream of making a successful career in the male-dominated shipping industry. This was a unique situation at the time, as very few females chose to train as pre-sea cadets. The nine girls were equally divided into three batches comprising 40 students in each.

“The numbers clearly established the fact that it was a male-dominated industry. It was also a very bold step for us nine girls to be joining shipping at that time. Later, I did realise that very few of us would come up (the ranks),” said Capt. Aakriti Barthwal, QHSE Superintendent, Synergy Navis Marine Pvt. Ltd.

Continuing her journey, chalking out a growth plan, proving her capabilities, credibility and dedication for the next over a decade, her efforts finally got rewarded. In January 2017, she earned her command on board the vessel Swarna Krishna, owned and managed by SCI.

“This was only possible because The Shipping Corporation of India gave us females the opportunity and the floor to grow, expand and know our horizons. I also had immense support from my family, especially my husband, who, being a seafarer himself, understood the challenges and rewards of a career in shipping,” she shared.

Interestingly, among the nine girls who took up training as pre-sea cadets, only one made it to the rank of a master. Of her eight batchmates, some advanced to positions like second officer or chief officer, others diversified their careers, and a few left the field entirely to pursue non-shipping careers. “I often wondered why this happened,” Capt. Barthwal reflected.

Citing reasons that were possibly responsible for such an outcome, she said that while women began exploring a career in shipping in the years between 2004 and 2008, there was a lot of apprehension among their parents and relatives as the career path and growth was not very clear.

“There were challenges on board including bitter experiences, lack of inclusivity and gender biases. Also, despite the selection criteria being the same for everyone, there was a sense of unacceptability on board for many females, which made them lose out. The roadblock is still the same and that’s why discussions about women in shipping and identifying ways and means for them to grow are very crucial,” she said.

Sharing her personal experience about challenges faced, Capt. Barthwal said that it took her 11 months to find a shore job after she decided to leave (for family reasons) sailing in January 2019. “It may look easy now but landing a shore job was a huge challenge five years ago. Despite the fact that I was a master mariner from an oil and chemical tankers background, companies were still hesitant on taking a female for the job,” said Capt. Barthwal. She added that after numerous meetings and rounds of interviews, she finally succeeded in November 2019 and became a QHSE (Quality, Health, Safety, and Environmental) Superintendent at Synergy Navis Marine.

“Synergy gave me the opportunity to become their first-ever female QHSE Superintendent after I proved that women bring equal credibility, having undergone the same rigorous training and work experiences,” she said.

Another significant milestone came in December 2024 when Capt. Barthwal became India’s first female RightShip inspector. RightShip, the world’s leading ESG (Environmental, Social, and Governance)-focused maritime platform, is renowned for its expertise in safety, sustainability, and social responsibility.

So how is the industry scenario like now for women aspiring to make a career in shipping? She said, “Things have changed drastically. There are various initiatives by the Government of India like the Maritime India Vision 2030 that has outlined 150 initiatives including becoming a top seafaring nation with world-class education, research and training.”

She pointed to the 2019 guidelines issued to ensure a conducive work environment for women on board ships. Initiatives like scholarships by the Maritime Training Trust and the ‘Sagar Mein Samman’ programme aim to enhance the role of women in the maritime sector. “This programme fosters respect and empowerment, helping women seafarers navigate their careers with dignity and pride,” she added.

Additionally, companies have embraced diversity, equity, and inclusion (DEI) initiatives, offering scholarships to underprivileged girls to remove financial barriers.

Seminars and webinars held by the government and private organisations have also played a role in addressing parents’ concerns, encouraging them to support their daughters’ ambitions in shipping.

Today, women are excelling in various roles, not just as officers but also as ratings professionals on chemical tankers, gas tankers, and other vessels. “These developments prove that when given the chance, women thrive and succeed in their shipping careers,” said Capt. Barthwal.

Despite all the initiatives and programmes by the government and the private sector to bring more women in shipping, challenges remain. Women constitute less than 2% of the global seafaring workforce. While more women are entering the field, only a small fraction rises to managerial or commanding positions. Entry into the industry has become easier, but career growth remains a challenge.

She stressed that promotions, leadership roles, and access to advanced training courses are still hurdles for women, whether on board ships or in shore-based roles. “The real challenge isn’t just recruiting women into shipping, it’s retaining them, supporting their growth, and enabling them to take leadership roles. Only then can the industry’s goals of gender equality and inclusivity become a reality,” she concluded.

Initiatives to foster leadership among women

To bridge the gap and support women in taking on leadership roles, the sector needs to:

– Provide more opportunities for women to gain experience and take on challenging assignments that prepare them for leadership positions.

– Implement structured mentorship programs that pair experienced women leaders with aspiring female seafarers and shore-based professionals.

– Offer leadership development training and coaching specifically tailored for women in the industry.

– Ensure fair and transparent promotion processes that evaluate candidates based on merit, not gender biases.

– Foster an inclusive work culture that values diversity and actively supports the career advancement of women.

– Collaborate with industry associations and the government to create policies and initiatives that enable women’s progression to senior roles.

(Write to us at editorial@bombaychamber.com)

Procurement Notice–State Pharmaceuticals Corporation of Sri Lanka

I wish to inform you that the Chairman, Departmental Procurement Committee of the State Pharmaceuticals Corporation of Sri Lanka has invited sealed bids for supply of following item to the Ministry of Health.

Please find attached herewith a copy of the procurement notices of the above.

It would be appreciated, if you could kindly make necessary arrangements to disseminate the same among your membership.

Thank you.

With warm regards,

Shirani Ariyarathne

Actg. Consul General

Minister (Commercial)

Consulate General of Sri Lanka

34, Homi Mody Street, Fort

Mumbai 400001

Tel: (+ 91 22 )22045861/22048303

Fax: (+ 91 22) 22876132

E -mail: slcg.mumbai@mfa.gov.lk