In a recent published report, Kenneth Research has updated the Market report for MSME Financing Market for 2021 till 2030. Report further now discusses; the various strategies to be adopted or being adopted by the business players across the globe at various levels in the value chain. In the view of the global economic slowdown, we further estimated that China, India, Japan and South Korea to recover fastest amongst all the countries in the Asian market. Germany, France, Italy, Spain to take the worst hit and this hit is expected to be regain 25% by the end of 2021- Positive Growth in the economic demand and supply.
U.S. Market recovers fast; In a release on May 4th 2021, the U.S. Bureau and Economic Analysis and U.S. Census Bureau mentions the recovery in the U.S. International trade in March 2021. Exports in the country reached $200 billion, up by $12.4 billion in Feb 2021. Following the continuous incremental trend, imports tallied at $274.5 billion, picked up by $16.4 billion in Feb 2021. However, as COVID19 still haunts the economies across the globe, year-over-year (y-o-y) average exports in the U.S. declined by $7.0 billion from March 2020 till March 2021 whilst imports increased by $20.7 billion during the same time. This definitely shows how the market is trying to recover back and this will have a direct impact on the Healthcare/ICT/Chemical industries, creating a huge demand for MSME Financing Market Products.
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Micro, small and medium enterprises (MSMEs) play a pivotal role in the Indian economy. About 63.38 Mn enterprises operational in various industries have provided employment to more than 111 Mn people. The MSME sector accounts for 30% of the country’s GDP, which is likely to touch 50% in 2025. The industry’s financing needs depend on the nature, size, customer segments and stage of development of the different businesses. Financial institutions have limited their lending exposure to the Indian MSME industry due to the high cost of service, small ticket size of loans and limited ability of MSMEs to offer immovable collaterals.
As of 2019, the overall addressable demand for external credit was ~INR 41.64 Tn, while the total supply of fund stood at INR 13.54 Tn.
Therefore, the credit gap in the MSME industry accounted for ~INR 28.10 Tn in 2019.
Debt demand of the MSME sector in India:
The consolidated debt demand (both short-term and long-term finance) by Indian MSMEs accounted for ~99.39 Tn in 2019. Microenterprise debt demand accounted for INR 13.32 Tn, small enterprise accounted for INR 24.57 Tn, and medium enterprise accounted for INR 3.75 Tn of the total debt demand in the industry. Medium and small firms being more formalized in operations are better at securing collaterals with NBFCs and banks than micro-enterprises.
Credit supply to the MSME sector in India:
The overall credit supply, including both the formal and the informal sectors, is worth INR 86.08 Tn. The formal and the informal sectors contribute ~INR 13.54 Tn and INR 72.54 Tn, respectively to the overall credit supply. Banking and other financial institutions account for ~INR 11.68 Tn of the overall formal finance supply to the Indian MSME industry.
Credit gap in the MSME sector in India:
The overall credit gap is estimated to be ~INR 28.10 Tn, which can be attributed to underserved micro and small units. Further, lack of awareness among entrepreneurs about the various loan products and lack of proper documentation have considerably reduced the supply of debt.
Impact of COVID-19:
Small businesses are the most vulnerable to an unexpected crisis like COVID-19 because of their size, scale of business operation and limited financial management resources. However, the government has announced several policy measures to minimize the losses.
The announcement of a targeted long-term repo operation (TLTRO) of INR 500 Bn, a grant of INR 3 Tn collateral-free automatic loans, INR 200 Bn subordinated debt to stressed MSMEs, and a complete ban on global tenders for procurement of goods and services for up to INR 2 Bn are a few of the crucial policy mandates.
“Final Report will add the analysis of the impact of COVID-19 on this industry.”
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Companies covered:
• Axis Bank of India
• Bajaj Finserv Limited
• Central Bank of India
• Federal Bank Limited
• HDFC Bank Limited
• ICICI Limited
• Kotak Mahindra Bank Limited
• State Bank of India
• Union Bank of India
• Utkarsh Micro Finance Bank
The report further discusses the market opportunity, compound annual growth rate (CAGR) growth rate, competition, new technology innovations, market players analysis, government guidelines, export and import (EXIM) analysis, historical revenues, future forecasts etc. in the following regions and/or countries:
- North America (U.S. & Canada) Market size, Y-O-Y growth, Market Players Analysis & Opportunity Outlook
- Latin America (Brazil, Mexico, Argentina, Rest of Latin America) Market size, Y-O-Y growth & Market Players Analysis & Opportunity Outlook
- Europe (U.K., Germany, France, Italy, Spain, Hungary, Belgium, Netherlands & Luxembourg, NORDIC, Poland, Turkey, Russia, Rest of Europe) Market size, Y-O-Y growth Market Players Analys & Opportunity Outlook
- Asia-Pacific (China, India, Japan, South Korea, Indonesia, Malaysia, Australia, New Zealand, Rest of Asia-Pacific) Market size, Y-O-Y growth & Market Players Analysis & Opportunity Outlook
- Middle East and Africa (Israel, GCC (Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, Oman), North Africa, South Africa, Rest of Middle East and Africa) Market size, Y-O-Y growth Market Players Analysis & Opportunity Outlook
The Market report answers the following questions:
What is the aim of the report?
- The market report presents the estimated market size of MSME Financing Market by the end of forecast period. Additionally, the historical and current market size is also examined in the report.
- Based on various indicators, the Year on Year growth (%) and compound annual growth rate (CAGR) for the given forecast period is offered.
- An overview of the Market based on geographical scope, market segmentation and financial performance of key players is presented in the report.
- The report presents current trends in the industry and future scope of the Market in North America, Asia Pacific, Europe, Latin America and Middle East and Africa.
- The various parameters accelerating the growth of Market are incorporated in the research report.
- The report analyzes growth rate, market size and valuation of the Market during the forecast period.
What aspects regarding the regional analysis Market are included in this report?
- Geographical regions covered in the report include North America, Europe, Asia Pacific, Latin America and Middle East & Africa region.
- The report consists of detailed region-wise analysis of current and future market trends, providing information on product usage and consumption.
- The growth rate of the market in every region, including their countries over the forecast period is included in the market report.
Based on what factors are the key market players assessed in this report?
- The report offers detailed analysis of leading companies in the market across the globe.
- It provides details of the major vendors involved in the Market including Key Playes
- A comprehensive overview of each company including the company profile, generated revenue, pricing of goods and the manufactured products is incorporated in the report.
- The facts and figures about market competitors along with standpoints of leading market players are presented in the report.
- The recent developments, mergers and acquisitions related to mentioned key players are provided in the market report.
What is the key information extracted from the report?
- Extensive information on factors estimated to affect the Market growth and market share during the forecast period is presented in the report.
- The report offers the present scenario and future growth prospects Market in various geographical regions.
- The competitive landscape analysis on the market as well as the qualitative and quantitative information is delivered.
- The SWOT analysis is conducted along with Porter’s Five Force analysis.
- The in-depth analysis provides an insight into the Market, underlining the growth rate and opportunities offered in the business.
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