The History and Importance of MSME Day – Explained

Micro, Small, and Medium Enterprises (MSMEs) are crucial to global economies, driving growth, innovation, and employment. To celebrate their impact, the United Nations established MSME Day. This day brings together leaders and entrepreneurs to discuss strategies and creative supportive environments for MSMEs in India. They are key to job creation and economic resilience.

The History of MSME Day

Established in 2017 by the UN, MSME Day recognises the role of small entrepreneurs in economic growth. The day underscores the need for business financing to support sustainable development and innovation. Annual themes focus on challenges like working capital access, trade expansion and business skills development.

Importance of MSME Day for Developing Countries

• MSME Day is crucial for India as it promotes your business growth by creating jobs and reducing income disparity. 
• The sector employs over 110 million people, making it a key contributor to the small businesses account in the Indian economy. 
• MSMEs help foster entrepreneurship in rural and semi-urban areas, driving inclusive economic development. 

These of MSME Day

Let’s take a look at all the themes from 2017 to 2024:

• MSME Day 2017- Small Business, Big Impact

This inaugural theme underscored the substantial impact of MSMEs on global economic frameworks. It highlighted their role in employment generation and GDP contributions across nations. It aimed to showcase the extensive impact the small enterprises have on job creation and community development. 

• MSME Day 2018- The Youth Dimension

The focus was on the role of young entrepreneurs in shaping the future of MSMEs. This theme celebrated the entrepreneurial spirit of youth and encouraged the integration of young innovators into the MSME sector. It recognized the potential to drive change and growth. 

• MSME Day 2019- Indian MSMEs, Global Aspirations

This theme centered on the ambitions of Indian MSMEs to expand their reach beyond national borders. It highlighted the global aspirations of Indian small and medium enterprises and their efforts to compete on an international scale while contributing to the global economy. 

• MSME Day 2020- COVID-19: The Great Lockdown and its Impact on Small Business

This year’s theme addressed the unprecedented challenges faced by MSMEs due to the COVID-19 pandemic. It focused on the impact of lockdowns on small businesses and the urgent need for support and recovery strategies to help them navigate the crisis. 

• MSME Day 2021- Roadmap for MSME Resilience and Recovery

The theme emphasized the importance of developing strategies and recovery post-pandemic. It aimed to provide a framework for businesses to rebuild and adapt. It ensures their long-term sustainability and growth. 

• MSME Day 2022- Resilience and Rebuilding: MSMEs for Sustainable Development

This year focused on the resilience of MSMEs and their role in rebuilding economies sustainably. It highlighted how small MSME businesses can contribute to sustainable development through innovation and responsible practices. It helps to create a more resilient economic future. 

• MSME Day 2023- Building a Stronger Future Together

The theme centered on collective efforts to strengthen the MSME sector. It encouraged collaboration among businesses, governments, and communities to build a steady and inclusive future. It leverages joint resources and strategies for shared success.  

• MSME Day 2024- Leveraging Power and Resilience of Micro-, Small, and Medium-Sized Enterprises (MSMEs) to Accelerate Sustainable Development and Eradicate Poverty in Times of Multiple Crisis

This theme focuses on harnessing the strength and resilience of MSMEs to drive sustainable development and combat poverty amidst ongoing crises. It highlighted how MSMEs can play a pivotal role in addressing global challenges and fostering economic stability and growth. 

Significance of MSME Day

MSME Day highlights the vital role of these enterprises in the global economy. It raises awareness, promotes policies, and celebrates achievements. It ensures continuous support and growth:

• To Raise Awareness of the Importance of MSMEs in the Global Economy

MSME Day emphasises how these businesses contribute to economic stability, employment and innovation. With 90% of businesses classified as MSMEs providing 60 to 70% implement, they are essential for economic growth and sustainable development.

• To Educate the Public About MSMEs

This day informs consumers about MSMEs’ role in community development. Supporting local businesses fosters economic diversity and growth, encouraging more people to invest money for small business expansion. 

• To Promote Policies that Support MSMEs

Governments utilise this day to address key challenges by improving access to finance markets and technology. New initiatives often simplify the process to MSME loan apply online and enhance overall industry support. 

• To Highlight the Contribution of MSMEs to Economic Growth and Sustainable Development

This day showcases their impact on job creation, sustainability and economic progress. They often lead in adopting responsible business practices, benefitting both local communities and global markets. 

• To Celebrate the Achievements of MSMEs and to Commit to Supporting their Growth and Development

This day recognises MSMEs’ resilience and success, inspiring others to pursue entrepreneurship and business. Governments and organisations reaffirm their commitment through policies like low small business loan rates and incentives for expansion., 

MSME Day in India

With over 400 lakh MSME, this sector is the backbone of India’s economy, contributing 30% to GDP and employing 11 crore people. MSME Day highlights their role in economic growth and self-reliance. 

• Widespread Economic Impact: 99% of Indian MSMEs are micro-enterprise, playing a crucial role in urban and rural development. Their contribution to employment also advances gender equality by promoting women’s participation in business.
• Government Support and Initiatives: On this day, MSME loan schemes and incentives are introduced to foster growth. Entrepreneurs can easily business loan apply online for funding, ensuring financial support to expand operations.  
• Celebration through Events: India marks this day with workshops, exhibitions and seminars, allowing businesses to explore financing options using business loan calculators or business loan EMI calculators to plan investments effectively.

How MSME Day Differs from Small Industry Day 

• MSME Day has a global focus on the contribution of medium businesses. While Small Industry Day observed on August 30 in India, is recognised by small business financing on a national level. 
• The former highlights business expansion and policies for all sectors. The latter emphasises business skills in industries like textiles, food, processing, and handicrafts. 
• Government initiatives launched on this day often aim to provide financial assistance through schemes such as the Credit Guarantee Fund Scheme for micro and small enterprises.

MSME Day Celebration in the World

Globally, MSME Day fosters collaboration, education and policy reform. Countries celebrate through networking events, expos, and financial aid initiatives. 

• Networking Events

Networking events connect MSME owners, industry leaders and policymakers. It fosters collaborations and growth opportunities. These sessions help small businesses engage with larger enterprises and investors.

• Expos and Trade Shows

Expos and trade shows showcase MSME products and services, offering visibility and networking opportunities. These events help businesses expand their market reach and attract potential investors. 

• Government Initiatives

Many countries announce new MSME-friendly announce new MSME-friendly policies, improving business loan interest rate structures and facilitating access to capital for small businesses. 

• Workshops and Training Sessions

Workshops provide MSME owners with essential skills in digital marketing, financial management and sustainability. It helps them stay competitive in a globalised market. 

• Public Awareness Campaigns

These campaigns by government and NGOs promote local businesses by showcasing MSME success stories and encouraging consumers to support small enterprises. 

Contribution of MSMEs to the Global Economy

Micro, Small, and Medium Enterprises (MSMEs) are the backbone of economic growth worldwide, with their impact particularly pronounced in developing nations like India. Their contributions span multiple facets of the economy:

• Employment Generation: MSMEs are unparalleled job creators, employing crores of Indians across diverse sectors. These enterprises provide livelihoods not just in urban centers, but crucially in rural and semi-urban areas. It fosters inclusive growth and reduces regional economic disparities. 

• GDP Contribution: In India, MSMEs contribute nearly 30% to the national GDP, showcasing their pivotal role in economic output. This substantial share underscores how the collective efforts of millions of small businesses drive overall economic progress and stability. 

• Export Potential: Indian MSMEs are increasingly making their mark on the global stage, accounting for about 45% of the country’s total exports. From traditional handicrafts to innovative tech solutions, these enterprises showcase India’s diverse capabilities to international markets. 

• Technological Innovation: MSMEs often serve as incubators for groundbreaking ideas and technologies. Their agility allows for rapid adoption of new technologies. It drives digital transformation across industries and enhances India’s competitiveness in the global marketplace. 

• Entrepreneurial Ecosystem: The MSME sector in India nurtures a vibrant entrepreneurial culture, providing a launching pad for startups and fostering innovation. Success stories from this sector inspire new generations of entrepreneurs. It creates a self-sustainable cycle of economic growth and job creation.

Challenges Faced by MSMEs

Despite their crucial role, Indian MSMEs face several hurdles that impede their growth and sustainability:

• Access to Financing: Many struggle to get business loans due to collateral and credit issues.

• Access to Markets: Limited domestic and international reach restricts their growth. 

• Access to Technology: Lack of modern technology reduces productivity and competitiveness.

• Regulation: Bureaucratic hurdles and complex laws slow business operations.

• Skills and Training: Shortages of skilled labour hinder innovation and competitiveness.

Initiatives and Support for MSMEs

Recognizing the importance of MSMEs, various stakeholders in India have launched initiatives to support their growth:

• Financial Assistance: The government and financial institutions offer specialized loan schemes and credit guarantee scheme for MSMEs. For instance, the MUDRA scheme provides collateral-free loans to micro-enterprises, fostering financial inclusion. 

• Skill Development and Training: Programs like the Skill India Mission focus on enhancing the capabilities of MSME entrepreneurs and workers. These initiatives aim to bridge the skill gap and improve the overall composition of the sector. 

• Business Development Services: Organizations like the MSME Development Institute provide comprehensive support including market research, technology upgradation guidance, and export assistance. These services help MSMEs optimize their operations and explore new growth avenues. 

• Networking Events: Industry associations and government bodies regularly organize trade fairs, exhibitions, and B2B meets. These events create platforms for MSMEs to showcase their products, find new customers, and forge strategic partnerships. 

• Government Grants and Loans: Various schemes offer financial incentives for upgrading technology, quality certification, and marketing assistance. These grants aim to reduce the financial burden on MSMEs and encourage their modernization and expansion. 

List of Global Organisations that Provide Support to MSMEs

• The United Nations Development Programme (UNDP)

The UNDP’s support for MSMEs through initiatives focused on sustainable development, inclusive business models and climate adaptation. It helps small businesses grow while addressing social and environmental challenges. 

• The World Bank

The World Bank provides financial aid, policy guidance and technical support to MSMEs in developing countries. Its programs improve access to capital, enhance business environments and drive innovation. 

• The International Finance Corporation (IFC)

As part of the World Bank Group, IFC provides funding and advisory services to MSMEs. It helps businesses adopt best practices, integrate into global supply chains and navigate regulatory challenges. 

• The Small Business Administration (SBA)

Though a U.S. government agency, the SBA’s loan guarantees, entrepreneurship education and disaster relief programs serve as a global model for MSME support. It focuses on aiding women and minority entrepreneurs and has influenced international policies. 

• The Association for Small Business and Entrepreneurship (ASBE)

ASBE fosters knowledge-sharing, research and networking for MSMEs. Its conferences and publications influence small business policies worldwide. It promotes innovation and growth. 

List of Prominent Indian Organisations that Support MSMEs

• Ministry of Micro, Small and Medium Enterprises (Ministry of MSMEs)

The ministry oversees key schemes like the Prime Minister’s Employment Generation Programme (PMEGP) and Credit Linked Capital Subsidy Scheme (CLSS) which supports MSME financing, skill development and modernisation. 

• Small Industries Development Bank of India (SIBDI)

SIDBI offers financial services, promotes innovative lending models and advocates policies to bridge the credit gap for MSMEs. It plays a crucial role in funding and fostering sustainable growth. 

• Confederation of Indian Industry (CII)

CII provides networking opportunities, connects MSMEs with large corporations and engages in policy advocacy to create a more favourable business environment for small enterprises. 

• National Small Industries Corporation (NSIC)

NSIC helps MSMEs with marketing support, raw materials procurement and technology adoption. Its MSME Mart and Infomediary Services improve market access and competitiveness. 

• Small Industries Development Corporation (SIDC)

Operating at the state level, SIDC develops industrial infrastructure, supports MSME clusters and facilitates technology transfer to enhance business efficiency. 

• Entrepreneurship Development Institute of India (EDII)

EDII specialises in entrepreneurship training and research. It focuses on empowering marginalised communities and promoting rural enterprises to foster inclusive economic growth. 

Conclusion

MSME Day highlights the essential role of Micro, Small, and Medium Enterprises (MSMEs) in driving global economic growth, innovation and inclusive development. It emphasizes the need for sustained support through effective policies, access to finance, and capacity-building initiatives. It urges collective action from all stakeholders to create an environment where MSMEs can thrive. In India, organizations like Lendingkart play a vital role in bridging the financing gap, empowering MSMEs to grow, and significantly contributing to economic progress. Ultimately, MSME Day is both a celebration and a call to action to invest in a sustainable and inclusive future.