The world is looking at India for solutions in the fintech domain, thanks to IndiaStack, the government’s moniker for a set of open APIs and digital public goods aiming to unlock the economic primitives of identity, data, and payments at a population scale.
The Indian government states IndiaStack’s rapid adoption by billions of individuals and businesses has helped promote financial and social inclusion, positioning the country for the internet age. From the unique ID system in the form of an Aadhaar Card to electronic know-your-customer (KYC), electronic signatures, DigiLocker Unified Payments Interface (UPI), and account aggregator framework, IndiaStack has pivoted India a step ahead in global fintech evolution.
Moreover, the Australia-India Council report- ‘An Indian Economic Strategy to 2035’ pegs digital finance to boost the country’s GDP by US$ 950 billion by 2025. The report sees the Indian financial services sector’s growth driven by rising incomes, heightened government focus on financial inclusion, the increasing pace of digital adoption, and a large unbanked and underserved population.
The Indian government and policymakers are set to benefit the country’s business sector by enabling stakeholders via crucial policies. This includes the imminent e-commerce policy that will determine the purchase and sale of goods via digital means and the Reserve Bank of India’s separate department for fintech to facilitate innovation and identify and address challenges/opportunities in the sector. These two key adoptions could immensely benefit Indian Micro, Small, and Medium Enterprises (MSMEs), given how well the country’s backbone sector embraces finance and technology.
It looks like the golden era for the Indian MSMEs is finally here. And small businesses could make the best of it propelled by robust knowledge of financial offerings by IndiaStack, its widespread adoption, and application in day-to-day business to outgrow domestic and global peers.
Amid such rapid changes to the way goods and services are dealt with, it is paramount for MSMEs to solemnly consider a three-pronged approach to survive and thrive.
The easiest way MSMEs can benefit from the searing changes in the financial sector is by educating themselves with the latest tools and means available to conduct day-to-day business.
From procuring raw material quotations, raising capital, using a digital supply chain to adopting cash-free payments, finding your customers, suppliers, and competition, new-age companies, are taking all the processes on the digital platform. These companies are easily approachable and can benefit businesses to transition from offline trade to online trade, thereby opening a million possibilities worldwide.
While learning to transition age-old processes online may seem like a herculean task, the easiest way to do so is by adopting these processes quickly. A global pandemic has proved businesses can’t run in silos. It needs to embrace all means to sustain itself, digital processes being among the key to reaching a broader customer base.
The active adoption of digital payments by Indian businesses via applications and the Indian government-led UPI need to be increasingly implemented by the country’s MSMEs.
This is a crucial step in the growth of the Indian MSMEs. Small businesses can propagate the use of digital processes across multiple layers of their operations and collectively benefit the society at large by learning-embracing-sharing information and resources.
In addition, the Indian household, still comprising of joint businesses and hierarchical wealth, can multifold if channelized towards a digital-first approach. For this, companies need to assimilate the financial knowledge they gain and normalize the adoption of technological advancement for it to have a trickle-down impact.
India is at the cusp of innovation, followed by growth led by the nation’s tech-savvy entrepreneurs. This phenomenon is unique and can make this decade a remarkable success for the country.
Real-time financial education among MSMEs can happen only when all businesses wholeheartedly implement innovation and grow with the changing times. Two simple ways of doing it are investing in new-age tools and techniques directly or using the expertise of new-age companies to enable their processes in line with global expectations.
The article was first published on bfsi.eletsonline.com