Top Five Challenges for Indian MSMEs on World MSME Day 2025 — and How to Solve Them

While Indian MSMEs face significant challenges, there are equally strong opportunities to resolve them through targeted policies, partnerships, and ecosystem strengthening. Here are practical, actionable solutions that can help address each challenge:

1️⃣ Access to Timely and Affordable Credit

Possible Solutions:

• Expand the coverage and outreach of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

• Promote co-lending partnerships between traditional banks and fintech lenders to widen credit access.

• Simplify KYC and loan documentation using Aadhaar-linked data.

• Launch awareness programs to educate MSMEs on alternate finance, such as invoice discounting, crowdfunding, and supply chain financing.

• Implement real-time digital dashboards to monitor loan disbursement for transparency.

2️⃣ Delayed Payments and Receivables

Possible Solutions:

• Strengthen the enforcement of the MSMED Act’s 45-day payment rule with automated penalty systems.

• Promote the TReDS (Trade Receivables Discounting System) platform among MSMEs and make its adoption mandatory for large buyers.

• Digitize public procurement systems fully to ensure faster payment cycles.

• Establish MSME ombudsman cells in every district to resolve payment disputes quickly.

3️⃣ Technology Adoption and Digital Skilling

Possible Solutions:

• Provide MSME-focused digital adoption grants or subsidies for technology upgrades.

• Organize regular workshops on digital literacy through District Industry Centres and industry associations.

• Encourage partnerships with edtech and skilling companies to train MSME owners and employees in practical tech skills.

• Promote affordable, easy-to-use SaaS tools specifically designed for MSME needs.

• Include “digital transformation audits” as part of MSME support programs to guide them through their digital journey.

4️⃣ Complex Regulatory Compliance

Possible Solutions:

• Integrate all key compliance requirements into a single digital portal for MSMEs, reducing multiple filings.

• Offer “compliance simplification advisors” through MSME Development Institutes to support micro and small entrepreneurs.

• Roll out periodic compliance awareness webinars explaining rule changes in plain language.

• Develop graded compliance frameworks, where micro and small units face simpler norms than medium or large enterprises.

5️⃣ Lack of Skilled Workforce and Talent Retention

Possible Solutions:

• Launch MSME-specific apprenticeship programs with government incentives to train youth.

• Encourage industry-academia partnerships with local polytechnics, ITIs, and skill universities.

• Offer targeted tax benefits to MSMEs that invest in employee skilling and upskilling.

• Promote wage-support programs for MSMEs in emerging sectors such as green manufacturing, AI, or advanced logistics.

• Establish local talent pools and MSME-focused employment exchanges to help match skilled candidates to opportunities.

Building a Resilient MSME Ecosystem

World MSME Day 2025 is not just about recognising problems — it is also about pushing for solutions. Stakeholders across government, financial institutions, corporates, and MSME associations must come together with urgency to deliver reforms and programs that translate directly into growth, competitiveness, and resilience.

At SMEStreet, we believe that enabling the success of MSMEs is essential to build a sustainable, developed India by 2047.