MSME Day 2025: Powering India's Growth through Sustainable Innovation

June 27 marks World MSME Day—a global recognition of the enormous impact Micro, Small, and Medium Enterprises (MSMEs) have on our economies. The United Nations designated this day in 2017 to celebrate the resilience, innovation, and contributions of MSMEs to job creation, economic progress, and sustainable development.

At Ratnaafin, we embrace this opportunity to acknowledge the transformative role that MSMEs play, particularly in India—where these enterprises form the backbone of inclusive and sustainable growth.

Why MSMEs Drive Global Economic Success

MSMEs stand as pillars of the global economy, demonstrating their vital importance through impressive numbers:

- 90% of businesses worldwide operate as MSMEs

- 60–70% of employment stems from these enterprises

- 50% of global GDP flows from MSME contributions

The World Bank projects that over 600 million jobs will be required by 2030 to accommodate the growing global workforce. This projection makes MSME development a critical priority for governments worldwide, underscoring the sector's role in shaping our economic future.

India's MSME Powerhouse: Numbers That Tell a Story

India's economic narrative features over 6.5 crore MSMEs as central characters, driving remarkable contributions:

- 31% of India's GDP originates from MSME activities

- 45% of total exports flow through these enterprises

- More than 28 crore people find employment in this sector

This reach extends from khadi artisans weaving in rural villages to sophisticated enterprises contributing components for ISRO's space missions. India's MSMEs truly span the spectrum—from Charkha to Chandrayaan.

The Remarkable Sectoral Diversity of Indian MSMEs

Indian MSMEs demonstrate extraordinary versatility across industries:

Manufacturing Excellence:

- Apparel and textiles

- Furniture and home goods

- Pharmaceuticals and healthcare products

Service Innovation:

- Retail trade and distribution

- Food services and hospitality

- Computer repair and IT support

- Tourism and travel services

Cutting-Edge Technology:

- Aerospace components manufacturing

- Precision engineering

Traditional Heritage:

- Khadi and village industries

- Artisan crafts and handloom products

Understanding MSME Classification: The 2020 Revolution

India adopted a comprehensive twin-criteria classification system in 2020, creating clear pathways for business growth:

Investment Threshold: Up to ₹50 crore in Plant & Machinery (revised to ₹125 crore effective April 2025)

Revenue Benchmark: Up to ₹250 crore Annual Turnover (revised to ₹500 crore)

This strategic redefinition fosters greater inclusivity while encouraging informal micro-enterprises to enter the formal ecosystem—a move that benefits both businesses and the broader economy.

The Formalisation Revolution: Digital Transformation in Action

The push toward formalisation has yielded impressive results, with 6.5 crore enterprises now registered through the Udyam Registration and Udyam Assist Platform. This registration unlocks access to crucial business advantages:

- Priority Sector Lending from financial institutions

- Government schemes and incentives

- Affordable credit options

- Digital infrastructure support

According to ASUSE 2025 data, India hosts 7.34 crore non-agricultural unincorporated enterprises, reflecting the accelerating shift toward formalisation that strengthens the entire sector.

Bridging the Credit Gap: Finance Access Transforms

The period from 2020 to 2025 has witnessed remarkable progress in MSME finance accessibility:

Micro and Small Enterprises: Credit access through scheduled banks increased from 14% to 20%

Medium Enterprises: Access jumped from 4% to 9%

The Credit Guarantee Scheme tells an even more compelling story:

- 2000–2023: 70.7 lakh guarantees worth ₹4.27 lakh crore

- 2023–2025: 44.39 lakh guarantees worth ₹5.08 lakh crore (in just two years)

These numbers reveal accelerated financial inclusion and growing confidence in digital lending platforms, creating opportunities for MSMEs to scale operations and pursue ambitious growth plans.

Sustainable Growth: The 2025 Theme Driving Innovation

This year's MSME Day theme—"Enhancing the role of MSMEs as drivers of Sustainable Growth and Innovation"—aligns perfectly with India's Viksit Bharat 2047 vision. The progress indicators demonstrate meaningful adoption:

- 90% of MSMEs now utilize digital payments

- 18% have embraced digital lending solutions

- One-third have begun adopting green or sustainable practices

However, limited awareness remains a significant challenge—one that financial institutions and policymakers must address through targeted education, meaningful incentives, and improved access to green technology.

Public Procurement: Creating Demand Certainty

Public Sector Units (CPSEs) operate under mandates to procure from MSMEs, generating substantial business opportunities:

- FY 2023–24: ₹74,828 crore in procurement value

- FY 2024–25: ₹93,697 crore (representing 25% year-over-year growth)

This procurement commitment provides MSMEs with demand certainty, enabling confident planning and scaling of operations to meet growing market needs.

Celebrating Excellence: National MSME Awards Drive Innovation

The Government of India's National MSME Awards program recognizes and promotes:

- Innovation in products and processes

- Risk-taking entrepreneurial spirit

- Job creation and employment generation

- Sustainable practices and environmental responsibility

Beyond motivating current entrepreneurs, these awards inspire the next generation of MSME leaders to pursue excellence and contribute to national economic growth.

How Ratnaafin Empowers MSME Success

At Ratnaafin, our commitment to MSME growth translates into comprehensive support:

Financial Solutions:

- Tailored Business Loans and specialized MSME finance

- Loan Against Property for working capital needs

- Machinery Loans, Solar Loans, and sector-specific financing

Strategic Support:

- Financial advice aligned with sectoral trends

- Guidance on regulatory updates and compliance

- Digital transformation consulting

We collaborate closely with MSMEs to bridge credit gaps, facilitate operational scaling, and support the embrace of digital transformation that drives competitive advantage.

Building Tomorrow's MSME Ecosystem

MSME Day represents more than celebration—it serves as a call for collective action toward unlocking the full potential of India's entrepreneurial spirit.

To maximize MSME impact, we must focus on:

Infrastructure Development: Building robust digital infrastructure that supports seamless business operations

Education and Awareness: Promoting financial literacy and awareness of available opportunities

Technology Integration: Enabling widespread tech adoption and green innovation

Financial Accessibility: Ensuring easy access to affordable finance across all enterprise sizes

Our Commitment to India's MSME Future

At Ratnaafin, we stand alongside India's MSMEs as a trusted financial partner, committed to building a resilient, self-reliant, and prosperous Viksit Bharat. Together, we're not just financing businesses—we're funding dreams, supporting innovation, and contributing to India's transformation into a global economic powerhouse.

The journey toward sustainable MSME growth continues, and we're honored to be part of this remarkable story of entrepreneurial success and national development.