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MSME Day 2024: Why celebrated? Know history, how it differs from Small Industry Day

June 27, 2024
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According to the United Nations Conference on Trade and Development, formal and informal MSMEs make up over 90% of all companies worldwide, average of 70% of total employment and 50% of GDP.

MSME Day 27th June 2024: World MSME Day is celebrated annually on June 27, designated by the United Nations General Assembly and dedicated to recognizing the critical role that MSMEs play in fostering inclusive and sustainable economic development in India and globally. The MSMEs have been the backbone of many economies, especially developing countries, contributing significantly to employment generation, poverty reduction and economic growth. MSMEs operate across various sectors, including manufacturing, services, agriculture, trade, driving innovation, entrepreneurship and local development. The observance of World MSME Day highlights the substantial contributions of MSMEs to the global economy and acts as a platform to raise awareness about the challenges faced by MSMEs. This includes access to finance, technology, skills development and market opportunities.

According to the United Nations Conference on Trade and Development, formal and informal MSMEs make up over 90% of all companies worldwide, average of 70% of total employment and 50% of GDP. Despite their significance, MSMEs continue to face challenges, primarily around access to finance. As per the International Finance Corporation (IFC) reports, around 65 million firms or 40% of formal MSMEs in developing countries, have an unmet financing need of $5.2 trillion annually. This gap is equivalent to 1.4 times the current level of global MSME lending. Moreover, regional disparities in access to finance also exist. East Asia and the Pacific account for the largest share (46%) of the total global finance gap, followed by Latin America, the Caribbean (23%), Europe and Central Asia (15%). The financing gap is even more pronounced, when considering micro and informal enterprises.

According to IFC, the gap volume varies considerably by region. Latin America, the Caribbean, the Middle East and North Africa have the highest proportion of the finance gap compared to potential demand, measured at 87% and 88%, respectively. About half of the formal SMEs lack access to formal credit. India is home to approximately 63 million MSMEs, as reported by the MSME Ministry’s FY23 annual report. This number is second only to China’s approximately 140 million micro and small enterprises. Indian MSMEs contribute about 30% to the GDP, over 40% to exports and have created 110 million jobs. Currently, as per details available on the Government Udyam registration portal, 46 million MSMEs were registered with the MSME Ministry and reported 200 million jobs. In addition to World MSME Day, India also observes National Small Industry Day annually on August 30. This day celebrates the contribution of the small-scale industry to the country’s growth. The Indian Government launched an extensive policy package for small industry on August 30, 2000 and since then, National Small Industry Day has been observed to recognize the efforts and achievements of small industries in India.

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