For MSMEs, Growth Needs More Than Capital: It Needs the Right Skills and the Right Access to Finance
New Delhi : For India’s MSMEs, growth is no longer only about expanding production or investing in new machinery. As technology, customer expectations and business models continue to evolve, enterprises also need skilled people and timely access to finance to turn opportunities into sustainable growth.
The latest episodes of SIDBI MSME Samvaad explore two important enablers of this journey - skilling and access to finance- and how both can help MSMEs strengthen their businesses and prepare for the future.
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Automation, digitalisation and new technologies are changing the way businesses operate. But investing in new machinery or technology is only one part of the equation. The people who operate and manage these resources need the right skills to make the investment count.
For MSMEs, skill requirements can vary by sector, size, workforce, and level of technology adoption. Identifying these gaps can help enterprises focus their training efforts where they matter most.
Technology and digital skills, quality-focused processes and people leadership are emerging as important capabilities for growing enterprises. And as a business moves from micro to small and then medium scale, continuous learning becomes increasingly important.
From Learning to Doing: Building a Stronger Skilling Ecosystem
India’s skilling ecosystem provides MSMEs, entrepreneurs and workers with several avenues to build new capabilities. Organisations such as the National Skill Development Corporation (NSDC), Sector Skill Councils and entrepreneurship development organisations support training across sectors.
Digital platforms such as the Skill India Digital Hub also provide opportunities to discover courses, undertake training and access certification.
For an MSME, learning cannot be a one-time exercise. As technologies and business requirements change, reskilling and upskilling can help enterprises improve productivity, quality and operational efficiency.
A Manufacturer’s Journey: Why Skills Matter
The experience of Shubhalaxmi PET, a Cuttack-based manufacturing enterprise that began as a small unit in 2011, illustrates this connection between technology and capability.
The enterprise manufactures PET preforms, bottles, jars and household plastic products. Its journey demonstrates that modern machinery needs to be supported by the right technical skills - not only to operate and maintain equipment, but also to ensure consistent product quality.
For growing manufacturers, the message is clear: technology can create new possibilities, but people and their capabilities help turn those possibilities into results.
Taking Finance Closer to Rural and Semi-Urban MSMEs
Skills are one part of the growth equation. Access to timely finance is another.
For entrepreneurs in rural and semi-urban markets, financing needs can go beyond day-to-day working capital. Businesses may require funds to purchase machinery, modernise operations, adopt new technology, maintain inventory or expand their operations.
This is where Regional Rural Banks (RRBs) can play an important role.
With their local branch networks and understanding of regional markets, RRBs can support MSMEs closer to where they operate. They can also assist first-time entrepreneurs in understanding documentation, registration, and other requirements involved in accessing formal credit.
Bringing Local Reach and Digital Lending Together
The SIDBI-RRB Co-Lending Arrangement brings together the local presence and customer understanding of RRBs with SIDBI’s MSME lending and digital capabilities.
Technology is helping make the lending journey more structured and transparent, from submitting an application to tracking its progress. Entrepreneurs can undertake the digital process themselves or seek assistance through participating RRB branches.
The experience of Maharashtra-based Rohit Traders offers one example. The business accessed working capital through the co-lending arrangement, helping it maintain inventory and meet customer demand more effectively.
Another example is AN Enterprises from Aligarh, which used machinery finance to expand production of horse-riding saddlery and related products. Following the installation of new machinery, the enterprise reported improvements in production and quality, along with an increase in its workforce.
Growth Happens When Capital Meets Capability
For an MSME looking to grow, finance and skills are not separate pieces of the puzzle. They work together.
Finance can help a business invest in machinery, technology, inventory and expansion. The right skills can help the business use those investments more effectively.
As MSMEs look to scale, strengthening human capabilities alongside access to formal finance can help them improve productivity, competitiveness and resilience.
The latest conversations on SIDBI MSME Samvaad bring these perspectives together — from building the skills needed for a changing business environment to making formal finance more accessible to enterprises across rural and semi-urban India.
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