The significance of Small and Medium-Sized Enterprises (SMEs) to a country’s economy does not require justification. It is one of those economic fields that have the power to foster inclusive growth and dramatically alter the economic landscape of a nation. Experts have correctly said that SMEs are the foundation of any nation.
The availability of financing for small and medium-sized businesses was reviewed during the G20 Global Partnership for Financial Inclusion (GPFI), which came to an end on January 11 in Kolkata (SMEs). In the OECD countries, SMEs make up roughly 99 percent of businesses, 70 percent of all jobs, and they provide more than 50 percent of the GDP in high-income countries worldwide, according to a 2021 article by McKinsey & Co.
Governments all across the world are developing programs and regulations to promote SMEs as they face complex problems in recent years. Additionally, the Covid epidemic has had a significant negative influence on the industry’s financial capacity. Due to the influence, they have on citizens, every challenge to SMEs is a challenge to economies and society as a whole.
To help the industry, governments throughout the world have launched a number of programs, including direct financial aid, governmental guarantees on loans, and tax relief. Even if financial help in any form is advantageous, long-term sustainability is not always a given for businesses.
What can the G20 offer?
The G20 is the most important platform for promoting economic cooperation among its members and other nations. The grouping also has a highly distinctive structure since it includes a variety of interaction groups and channels that might result in unified and thorough support for the industry.
Due to its wide structure and competence in fields like digitization, skill-building programs, and startup ecosystems, among others, the G20 has a lot to offer the SME sector. Governments may assist them by promoting digitization, assisting SMEs in acquiring new skills, changing their strategy to take a global perspective, etc.
India has advanced significantly both during and after COVID thanks to its sizable MSME sector, which includes more than six crore registered enterprises. The Prime Minister’s Employment Generation Programme and Udyami Bharat, among other initiatives, are exceptional instances of how India oversees the vast MSME market. On a worldwide basis, we need to inform and ready the business community for the coming digital transformation. According to India’s commitment to the G20’s inclusive growth aim, work has to be done to finance the sector and promote its expansion.