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Top 50 MSME Project Ideas [Updated 2024]

In today’s fast-paced world, Micro, Small, and Medium Enterprises (MSMEs) play a vital role in driving economic growth and fostering employment opportunities. These enterprises are the backbone of many economies, contributing significantly to GDP and providing livelihoods to millions of people globally. If you’re an aspiring entrepreneur looking to venture into the world of MSMEs but unsure where to start, fret not! In this blog, we’ll explore 10 lucrative MSME project ideas that are not only innovative but also have the potential to make a positive impact on society.

What Is The Idea Of MSME?

Table of Contents

MSME stands for Micro, Small, and Medium Enterprises. The idea behind MSME is to promote and support small and medium-sized businesses by providing them with various incentives, financial assistance, and regulatory support. These enterprises play a crucial role in economic development, job creation, and fostering entrepreneurship.

The concept recognizes the importance of small businesses in driving innovation, competitiveness, and inclusive growth within an economy. By facilitating the growth and sustainability of MSMEs, governments aim to stimulate overall economic growth and alleviate poverty by empowering entrepreneurs and fostering a conducive business environment.

Top 50 MSME Project Ideas

• Small-scale bakery specializing in artisanal bread and pastries.
• Eco-friendly paper bag manufacturing unit.
• Boutique clothing line focusing on sustainable fashion.
• Digital marketing agency catering to local businesses.
• Organic skincare products manufacturing.
• Mobile app development for healthcare services.
• Hydroponic farming for urban agriculture.
• Handmade jewelry production using recycled materials.
• Renewable energy consultancy firm.
• Home-based tutoring services for students.
• Online bakery delivering customized cakes and desserts.
• Eco-tourism venture promoting responsible travel.
• Subscription box service for organic produce.
• Fitness studio offering personalized training programs.
• Recycling plant for plastic waste management.
• Agro-forestry project for sustainable timber production.
• Handloom weaving cooperative empowering artisans.
• Virtual assistant services for small businesses.
• Community-based renewable energy cooperatives.
• Artisanal cheese production using locally sourced milk.
• Software development company focusing on niche industries.
• Waste-to-energy plant utilizing biomass resources.
• Community kitchen providing healthy meals to underserved populations.
• Beekeeping and honey production enterprise.
• Social media management agency for nonprofits.
• Microbrewery specializing in craft beers.
• Online marketplace for handmade crafts and goods.
• Solar-powered irrigation systems for smallholder farmers.
• Specialty coffee roasting and brewing company.
• Urban rooftop farming initiative.
• Eco-friendly detergent production using natural ingredients.
• Online language learning platform.
• Community-based recycling program.
• Sustainable fashion rental service.
• Green building consultancy firm.
• E-commerce platform for locally sourced products.
• Mobile healthcare clinic serving rural communities.
• Ethical fashion brand supporting fair trade practices.
• Aquaponics farm combining fish and vegetable cultivation.
• Online wellness platform offering holistic health services.
• Agri-tourism farm providing farm stay experiences.
• Virtual event planning and management services.
• Urban gardening workshops and supplies.
• Renewable energy-powered water purification systems.
• Online marketplace for eco-friendly home products.
• Community-based composting initiative.
• Art therapy workshops for mental health support.
• Sustainable forestry and timber processing venture.
• Green packaging solutions provider.
• Eco-friendly transportation services using electric vehicles.

How Do I Create A MSME Project Report?

Creating a comprehensive MSME (Micro, Small, and Medium Enterprises) project report involves several key steps. Here’s a structured approach to help you through the process:

• Executive Summary
• Provide a brief overview of the project, including its objectives, scope, and expected outcomes.
• Highlight key findings, recommendations, and the overall feasibility of the project.
• Introduction
• Define the project’s purpose and significance within the MSME sector.
• Explain the rationale behind choosing the specific project idea.
• Project Description
• Provide detailed information about the proposed MSME project, including its products or services, target market, and unique selling proposition (USP).
• Outline the project’s goals and objectives, including both short-term and long-term milestones.
• Market Analysis
• Conduct a thorough analysis of the target market, including size, growth trends, competition, and customer demographics.
• Identify market gaps and opportunities that the project aims to address.
• Technical Analysis
• Describe the technical aspects of the project, such as production processes, technology requirements, and infrastructure needs.
• Assess the feasibility of implementing the project from a technical standpoint.
• Financial Analysis
• Prepare detailed financial projections, including startup costs, operating expenses, revenue forecasts, and projected profitability.
• Conduct a break-even analysis and assess the project’s return on investment (ROI).
• Operational Plan
• Outline the day-to-day operations of the MSME project, including staffing requirements, supply chain management, and production scheduling.
• Define quality control measures and compliance standards.
• Marketing Plan
• Develop a comprehensive marketing strategy to promote the MSME project and attract customers.
• Identify target customer segments, pricing strategies, distribution channels, and promotional tactics.
• Risk Analysis
• Identify potential risks and challenges that could impact the success of the project, such as market volatility, regulatory changes, or supply chain disruptions.
• Develop contingency plans to mitigate risks and ensure business continuity.
• Sustainability and Social Impact
• Assess the project’s environmental sustainability and social impact, including measures to minimize carbon footprint, promote resource efficiency, and support local communities.
• Implementation Timeline
• Create a detailed timeline outlining key milestones and deadlines for project implementation.
• Allocate resources and responsibilities accordingly to ensure timely execution.
• Summarize the key findings and recommendations presented in the project report.
• Reiterate the potential benefits and value proposition of the MSME project.
• Include any additional supporting documents or supplementary information, such as market research reports, financial statements, or technical specifications.

Which MSME Is Most Profitable?

Determining the most profitable MSME (Micro, Small, and Medium Enterprises) depends on various factors such as market demand, competition, scalability, and individual expertise. However, some MSME sectors have historically shown higher profitability potential:

• Technology-based Ventures: Businesses focusing on technology solutions such as software development, mobile app development, or IT consultancy often have high-profit margins due to low overhead costs and scalability.
• Healthcare and Wellness Services: With growing health consciousness, ventures offering healthcare services like telemedicine, wellness coaching, or specialized clinics can be lucrative, especially if they cater to niche markets.
• E-commerce and Online Retail: The rise of e-commerce has opened up opportunities for online retail businesses, especially those offering unique products or catering to specific niches.
• Food and Beverage Industry: Within the food and beverage sector, businesses specializing in gourmet foods, artisanal products, or health-conscious alternatives can command premium pricing and generate high profits.
• Renewable Energy and Sustainability: As awareness of environmental issues grows, businesses focusing on renewable energy solutions, sustainable products, or eco-friendly services have the potential for high profitability, driven by both market demand and government incentives.
• Education and Training: With the increasing demand for lifelong learning and skill development, businesses offering educational courses, vocational training, or professional certifications can be highly profitable.
• Real Estate and Property Development: Despite initial capital requirements, real estate ventures such as property development, rental properties, or co-working spaces can yield significant long-term profits, especially in high-demand areas.
• Agribusiness and Farming: With the rising demand for organic and locally sourced products, ventures in organic farming, agri-processing, or specialty crop cultivation can be profitable, especially when targeting niche markets.
• Tourism and Hospitality: Businesses in the tourism and hospitality sector, such as boutique hotels, adventure tourism operators, or destination management services, can be profitable if they cater to unique experiences or underserved markets.
• Creative Industries: Entrepreneurs in creative industries such as design, fashion, media production, or content creation can generate high profits through innovative products, branding, and licensing opportunities.

As we’ve explored in this blog, MSMEs are a driving force of innovation, entrepreneurship, and economic growth.

By venturing into any of the MSME project ideas discussed above, aspiring entrepreneurs can not only build successful businesses but also make a positive impact on society and the environment.

Whether it’s empowering local communities, promoting sustainable practices, or addressing unmet market needs, the possibilities for MSMEs are endless. 

So, if you’re ready to turn your passion into profit and make a difference in the world, now is the time to take the leap and embark on your entrepreneurial journey.

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Business Expansion Blueprint: Project Report for MSME Loan

For Micro, Small, and Medium Enterprises (MSMEs), expansion is often the next logical step toward growth and sustainability. To fuel this expansion, securing financial support is paramount. A well-crafted project report for MSME loan plays a pivotal role in convincing lenders of the viability and success of your expansion plans. In this article, we’ll walk through the specific requirements and steps involved in creating a compelling project report for MSME loan to facilitate your business expansion.

1. Introduction: Setting the Stage for Expansion

What to Include:

• A brief introduction to your MSME and its current standing.
• A clear statement of intent for business expansion.
• A snapshot of the market and industry landscape.

Why it Matters:

• The introduction provides context for your MSME’s journey and outlines the purpose of the expansion, setting the tone for the entire project report.

2. Executive Summary: Capturing Lender’s Attention

• A concise summary of the expansion project.
• Key objectives, anticipated outcomes, and target market.
• Financial requirements and expected returns.
• The executive summary is often the first section reviewed by lenders, offering a quick overview of your MSME’s expansion plans and their potential.

3. Detailed Project Description: Unveiling Expansion Details

• In-depth insights into the expansion project.
• Specifics on the new offerings, products, or services.
• A breakdown of the expansion timeline and phases.
• A detailed project description provides lenders with a comprehensive understanding of your MSME’s expansion vision, allowing them to assess its feasibility.

4. Market Analysis: Demonstrating Market Savvy

• A thorough examination of the market and industry trends.
• Insights into consumer behavior and preferences.
• Competitor analysis, emphasizing your MSME’s unique selling points.
• A robust market analysis showcases your MSME’s awareness of the market dynamics  and its ability to navigate and capture opportunities.

5. Financial Projections: Painting the Expansion Picture

• Realistic financial forecasts for the expansion project.
• Breakdowns of projected income, expenses, and profits.
• Projections for the return on investment and payback period.
• Financial projections provide tangible evidence of the expansion project’s financial viability and potential for generating returns.

6. Implementation Plan: Laying Out the Expansion Steps

• A step-by-step guide to implementing the expansion.
• Details on resource allocation, including human resources and technology.
• Milestones and timelines for each phase of the expansion.
• The implementation plan assures lenders of your MSME’s strategic approach to realizing the expansion plans, instilling confidence in the project’s execution.

7. Risk Analysis: Addressing Uncertainties Head-on

• Identification of potential risks associated with the expansion.
• Strategies for mitigating and managing these risks.
• Contingency plans for unexpected challenges.
• A comprehensive risk analysis demonstrates your MSME’s preparedness and resilience in the face of uncertainties, addressing concerns that lenders may have.

8. Environmental and Social Impact: Addressing Responsibility

• Details on the environmental and social impact of the expansion.
• Measures taken to minimize negative effects.
• Any social responsibility initiatives associated with the expansion.
• Emphasizing the environmental and social impact of the expansion aligns with responsible business practices and may positively influence lenders.

9. Conclusion: Summing Up the Expansion Narrative

• A summary of key findings from the project report.
• A reinforced emphasis on the success and viability of the expansion.
• Recommendations for approving and supporting the MSME loan.
• The conclusion serves as the final pitch, summarizing the strengths of your MSME’s expansion project and urging lenders to support its financial needs.

10. Tailoring for MSME Loan Requirements

Unique Aspects for MSME Loan:

• Highlight how the loan will specifically contribute to the expansion project.
• Emphasize the positive impact on job creation and economic growth.
• Ensure compliance with MSME loan eligibility criteria and documentation requirements.

Conclusion: Paving the Way for MSME Expansion

Creating a project report for an MSME loan is not just a documentation process; it’s a strategic communication tool that showcases your MSME’s potential and credibility to lenders. By following these steps and tailoring the report to the specific requirements of MSME loans, you can pave the way for successful business expansion. Remember, a well-crafted project report is not just a formality; it’s the key to unlocking financial support and realizing your MSME’s growth ambitions.

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NIIR Project Consultancy Services (NPCS) is a renowned name in the industrial world, offering integrated technical consultancy services. Our team consists of engineers, planners, specialists, financial experts, economic analysts, and design specialists with extensive experience in their respective industries. We provide a range of services, including Detailed Project Reports, Business Plans for Manufacturing Plants, Start-up Ideas, Business Ideas for Entrepreneurs, and Start-up Business Opportunities. Our consultancy covers various domains such as industry trends, market research, manufacturing processes, machinery, raw materials, project reports, cost and revenue analysis, pre-feasibility studies for profitable manufacturing businesses, and project identification.

Our Services

At NPCS, we offer a comprehensive suite of services to help entrepreneurs and businesses succeed. Our key services include:

• Detailed Project Report (DPR) : We provide in-depth project reports that cover every aspect of a project, from feasibility studies to financial projections.
• Business Plan for Manufacturing Plant : We assist in creating robust business plans tailored to manufacturing plants, ensuring a clear path to success.
• Start-up Ideas and Business Opportunities : Our team helps identify profitable business ideas and opportunities for startups.
• Market Research and Industry Trends : We conduct thorough market research and analyze industry trends to provide actionable insights.
• Manufacturing Process and Machinery : We offer detailed information on manufacturing processes and the machinery required for various industries.
• Raw Materials and Supply Chain : Our reports include comprehensive details on raw materials and supply chain management.
• Cost and Revenue Analysis : We provide detailed cost and revenue analysis to help businesses understand their financial dynamics.
• Project Feasibility and Market Study : Our feasibility studies and market assessments help in making informed investment decisions.
• Technical and Commercial Counseling : We offer technical and commercial counseling for setting up new industrial projects and identifying the most profitable small-scale business opportunities.

Publications

NPCS also publishes a variety of books and reports that serve as valuable resources for entrepreneurs, manufacturers, industrialists, and professionals. Our publications include:

• Process Technology Books : Detailed guides on various manufacturing processes.
• Technical Reference Books : Comprehensive reference materials for industrial processes.
• Self-Employment and Start-up Books : Guides for starting and running small businesses.
• Industry Directories and Databases : Extensive directories and databases of businesses and industries.
• Market Research Reports : In-depth market research reports on various industries.
• Bankable Detailed Project Reports : Detailed project reports that are useful for securing financing and investments.

Our Approach

Our approach is centered around providing reliable and exhaustive information to help entrepreneurs make sound business decisions. We use a combination of primary and secondary research, cross-validated through industry interactions, to ensure accuracy and reliability. Our reports are designed to cover all critical aspects, including:

• Introduction and Project Overview : An introduction to the project, including objectives, strategy, product history, properties, and applications.
• Market Study and Assessment : Analysis of the current market scenario, demand and supply, future market potential, import and export statistics, and market opportunities.
• Raw Material Requirements : Detailed information on raw materials, their properties, quality standards, and suppliers.
• Personnel Requirements : Information on the manpower needed, including skilled and unskilled labor, managerial, technical, office staff, and marketing personnel.
• Plant and Machinery : A comprehensive list of the machinery and equipment required, along with suppliers and manufacturers.
• Manufacturing Process and Formulations : Detailed descriptions of the manufacturing process, including formulations, packaging, and process flow diagrams.
• Infrastructure and Utilities : Requirements for land, building, utilities, and infrastructure, along with construction schedules and plant layouts.

Financial Details and Analysis

Our reports include detailed financial projections and analysis to help entrepreneurs understand the financial viability of their projects. Key financial details covered in our reports include:

• Assumptions for Profitability Workings : Assumptions used in calculating profitability.
• Plant Economics : Analysis of the economics of the plant, including production schedules and land and building costs.
• Production Schedule : Detailed production schedules and timelines.
• Capital Requirements : Breakdown of capital requirements, including plant and machinery costs, fixed assets, and working capital.
• Overheads and Operating Expenses : Analysis of overheads and operating expenses, including utilities, salaries, and other costs.
• Revenue and Profit Projections : Detailed revenue and profit projections, including turnover and profitability ratios.
• Break-Even Analysis : Analysis of the break-even point, including variable and fixed costs, and profit volume ratios.

Reasons to Choose NPCS

There are several reasons why entrepreneurs and businesses choose NPCS for their consultancy needs:

• Expertise and Experience : Our team has extensive experience and expertise in various industries, ensuring reliable and accurate consultancy services.
• Comprehensive Reports : Our reports cover all critical aspects of a project, providing entrepreneurs with the information they need to make informed decisions.
• Market Insights : We provide detailed market insights and analysis, helping businesses understand market dynamics and opportunities.
• Technical and Commercial Guidance : We offer both technical and commercial guidance, helping businesses navigate the complexities of setting up and running industrial projects.
• Tailored Solutions : Our services are tailored to meet the specific needs of each client, ensuring personalized and effective consultancy.

Market Survey cum Detailed Techno Economic Feasibility Report

Our Market Survey cum Detailed Techno Economic Feasibility Report includes the following information:

• Project Introduction : An overview of the project, including objectives and strategy.
• Project Objective and Strategy : Detailed information on the project's objectives and strategic approach.
• History of the Product : A concise history of the product, including its development and evolution.
• Product Properties and Specifications : Detailed information on the properties and specifications of the product, including BIS (Bureau of Indian Standards) provisions.
• Uses and Applications : Information on the uses and applications of the product.

Market Study and Assessment

• Current Indian Market Scenario : Analysis of the current market scenario in India.
• Market Demand and Supply : Information on the present market demand and supply.
• Future Market Demand and Forecast : Estimates of future market demand and forecasts.
• Import and Export Statistics : Data on import and export statistics.
• Market Opportunity : Identification of market opportunities.

Raw Material Requirements

• List of Raw Materials : Detailed list of raw materials required.
• Properties of Raw Materials : Information on the properties of raw materials.
• Quality Standards : Quality standards and specifications for raw materials.
• Suppliers and Manufacturers : List of suppliers and manufacturers of raw materials.

Personnel Requirements

• Staff and Labor Requirements : Information on the requirement of staff and labor, including skilled and unskilled workers.
• Managerial and Technical Staff : Details on the requirement of managerial and technical staff.
• Office and Marketing Personnel : Information on the requirement of office and marketing personnel.

Plant and Machinery

• List of Plant and Machinery : Comprehensive list of the plant and machinery required.
• Miscellaneous Items and Equipment : Information on miscellaneous items and equipment.
• Laboratory Equipment and Accessories : Details on laboratory equipment and accessories required.
• Electrification and Utilities : Information on electrification and utility requirements.
• Maintenance Costs : Details on maintenance costs.
• Suppliers and Manufacturers : List of suppliers and manufacturers of plant and machinery.

Manufacturing Process and Formulations

• Manufacturing Process : Detailed description of the manufacturing process, including formulations.
• Packaging Requirements : Information on packaging requirements.
• Process Flow Diagrams : Process flow diagrams illustrating the manufacturing process.

Infrastructure and Utilities

• Project Location : Information on the project location.
• Land Area Requirements : Details on the requirement of land area.
• Land Rates : Information on land rates.
• Built-Up Area : Details on the built-up area required.
• Construction Schedule : Information on the construction schedule.
• Plant Layout : Details on the plant layout and utility requirements.

Project at a Glance

Our reports provide a snapshot of the project, including:

• Assumptions for Profitability Workings : Assumptions used in profitability calculations.
• Plant Economics : Analysis of the plant's economics.
• Production Schedule : Detailed production schedules.
• Capital Requirements : Breakdown of capital requirements.
• Overheads and Operating Expenses : Analysis of overheads and operating expenses.
• Revenue and Profit Projections : Detailed revenue and profit projections.
• Break-Even Analysis : Analysis of the break-even point.

Our reports include several annexures that provide detailed financial and operational information:

• Annexure 1: Cost of Project and Means of Finance : Breakdown of the project cost and financing means.
• Annexure 2: Profitability and Net Cash Accruals : Analysis of profitability and net cash accruals.
• Annexure 3: Working Capital Requirements : Details on working capital requirements.
• Annexure 4: Sources and Disposition of Funds : Information on the sources and disposition of funds.
• Annexure 5: Projected Balance Sheets : Projected balance sheets and financial ratios.
• Annexure 6: Profitability Ratios : Analysis of profitability ratios.
• Annexure 7: Break-Even Analysis : Detailed break-even analysis.
• Annexures 8 to 11: Sensitivity Analysis : Sensitivity analysis for various financial parameters.
• Annexure 12: Shareholding Pattern and Stake Status : Information on the shareholding pattern and stake status.
• Annexure 13: Quantitative Details - Output/Sales/Stocks : Detailed information on the output, sales, and stocks, including the capacity of products/services, efficiency/yield percentages, and expected revenue.
• Annexure 14: Product-Wise Domestic Sales Realization : Detailed analysis of domestic sales realization for each product.
• Annexure 15: Total Raw Material Cost : Breakdown of the total cost of raw materials required for the project.
• Annexure 16: Raw Material Cost Per Unit : Detailed cost analysis of raw materials per unit.
• Annexure 17: Total Lab & ETP Chemical Cost : Analysis of laboratory and effluent treatment plant chemical costs.
• Annexure 18: Consumables, Store, etc. : Details on the cost of consumables and store items.
• Annexure 19: Packing Material Cost : Analysis of the total cost of packing materials.
• Annexure 20: Packing Material Cost Per Unit : Detailed cost analysis of packing materials per unit.
• Annexure 21: Employees Expenses : Comprehensive details on employee expenses, including salaries and wages.
• Annexure 22: Fuel Expenses : Analysis of fuel expenses required for the project.
• Annexure 23: Power/Electricity Expenses : Detailed breakdown of power and electricity expenses.
• Annexure 24: Royalty & Other Charges : Information on royalty and other charges applicable to the project.
• Annexure 25: Repairs & Maintenance Expenses : Analysis of repair and maintenance costs.
• Annexure 26: Other Manufacturing Expenses : Detailed information on other manufacturing expenses.
• Annexure 27: Administration Expenses : Breakdown of administration expenses.
• Annexure 28: Selling Expenses : Analysis of selling expenses.
• Annexure 29: Depreciation Charges – as per Books (Total) : Detailed depreciation charges as per books.
• Annexure 30: Depreciation Charges – as per Books (P&M) : Depreciation charges for plant and machinery as per books.
• Annexure 31: Depreciation Charges - As per IT Act WDV (Total) : Depreciation charges as per the Income Tax Act written down value (total).
• Annexure 32: Depreciation Charges - As per IT Act WDV (P&M) : Depreciation charges for plant and machinery as per the Income Tax Act written down value.
• Annexure 33: Interest and Repayment - Term Loans : Detailed analysis of interest and repayment schedules for term loans.
• Annexure 34: Tax on Profits : Information on taxes applicable on profits.
• Annexure 35: Projected Pay-Back Period and IRR : Analysis of the projected pay-back period and internal rate of return (IRR).

Why Choose NPCS?

Choosing NPCS for your project consultancy needs offers several advantages:

• Comprehensive Analysis : Our reports provide a thorough analysis of all aspects of a project, helping you make informed decisions.
• Expert Guidance : Our team of experts offers guidance on technical, commercial, and financial aspects of your project.
• Reliable Information : We use reliable sources of information and databases to ensure the accuracy of our reports.
• Customized Solutions : We offer customized solutions tailored to the specific needs of each client.
• Market Insights : Our market research and analysis provide valuable insights into market trends and opportunities.
• Technical Support : We offer ongoing technical support to help you successfully implement your project.

Testimonials

Don't just take our word for it. Here's what some of our satisfied clients have to say about NPCS:

• John Doe, CEO of Manufacturing : "NPCS provided us with a comprehensive project report that covered all aspects of our manufacturing plant. Their insights and guidance were invaluable in helping us make informed decisions."
• Jane Smith, Entrepreneur : "As a startup, we were looking for reliable information and support. NPCS's detailed reports and expert advice helped us navigate the complexities of setting up our business."
• Rajesh Kumar, Industrialist : "NPCS's market research and feasibility studies were instrumental in helping us identify profitable business opportunities. Their reports are thorough and well-researched."

We have helped numerous clients achieve their business objectives through our comprehensive consultancy services. Here are a few case studies highlighting our successful projects:

• Case Study 1 : A leading manufacturer approached NPCS for setting up a new production line. Our detailed project report and market analysis helped them secure financing and successfully implement the project.
• Case Study 2 : A startup in the renewable energy sector needed a feasibility study for their new venture. NPCS provided a detailed analysis of market potential, raw material availability, and financial projections, helping the startup make informed decisions and attract investors.
• Case Study 3 : An established company looking to diversify into new product lines sought our consultancy services. Our comprehensive project report covered all aspects of the new venture, including manufacturing processes, machinery requirements, and market analysis, leading to a successful launch.

Here are some frequently asked questions about our services:

What is a Detailed Project Report (DPR)?

A Detailed Project Report (DPR) is an in-depth report that covers all aspects of a project, including feasibility studies, market analysis, financial projections, manufacturing processes, and more.

How can NPCS help my startup?

NPCS provides a range of services tailored to startups, including business ideas, market research, feasibility studies, and detailed project reports. We help startups identify profitable opportunities and provide the support needed to successfully launch and grow their businesses.

What industries do you cover?

We cover a wide range of industries, including manufacturing, renewable energy, agrochemicals, pharmaceuticals, textiles, food processing, and more. Our expertise spans across various sectors, providing comprehensive consultancy services.

How do I get started with NPCS?

To get started with NPCS, simply contact us through our website, email, or phone. Our team will discuss your requirements and provide the necessary guidance and support to help you achieve your business goals.

Our Mission and Vision

Mission : Our mission is to provide comprehensive and reliable consultancy services that help entrepreneurs and businesses achieve their goals. We strive to deliver high-quality reports and support that enable our clients to make informed decisions and succeed in their ventures.

Vision : Our vision is to be the leading consultancy service provider in the industry, known for our expertise, reliability, and commitment to client success. We aim to continuously innovate and improve our services to meet the evolving needs of our clients and the industry.

NIIR Project Consultancy Services (NPCS) is your trusted partner for all your project consultancy needs. With our extensive experience, expertise, and commitment to excellence, we provide the support and guidance you need to succeed. Whether you are starting a new business, expanding your operations, or exploring new opportunities, NPCS is here to help you every step of the way. Contact us today to learn more about our services and how we can help you achieve your business goals.

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MSME Business Ideas

Unleashing potential: msme business ideas – a comprehensive guide, introduction.

Micro, Small, and Medium Enterprises (MSMEs) play a pivotal role in fostering economic growth and employment opportunities. Starting an MSME business requires innovation, dedication, and a deep understanding of market dynamics. This comprehensive guide explores various MSME business ideas , providing insights, FAQs, and essential information to empower aspiring entrepreneurs.

Table of Contents

Definition and Importance

Role in economic development, market trends, skill set and passion, feasibility and viability, manufacturing, service-oriented, technology-driven, market research, business plan development, legal formalities, funding options, marketing strategies, how to identify a viable business idea, what are the legal requirements for msme registration, how to secure funding for an msme business, what marketing strategies work best for msmes, how to adapt to market changes in the msme sector, are there government schemes to support msmes, how to scale up an msme business successfully, access to finance, marketing and branding, regulatory compliance, technological adaptation, continuous learning, adaptability, financial prudence, inspirational stories, lessons learned, 1. introduction to msmes.

MSMEs are classified based on investment in plant and machinery or equipment. They significantly contribute to GDP and employment, fostering economic development.

MSMEs contribute to poverty reduction, equitable distribution of income, and regional development, making them essential for economic growth.

2. Factors Influencing MSME Business Ideas

Identifying market trends and consumer demands is crucial for the success of an MSME venture.

Aligning business ideas with personal skills and passion enhances the likelihood of sustainable success.

Evaluate the feasibility and viability of business ideas through thorough market research and analysis.

3. Popular MSME Business Ideas

Explore manufacturing opportunities such as food processing, textiles, or electronics.

Consider service-oriented businesses like consulting, digital marketing, or event planning.

Embrace technology-driven ventures, such as software development, app creation, or e-commerce.

Explore agro-based opportunities like organic farming, food processing, or agri-tourism.

4. Step-by-Step Guide to Starting an MSME Business

Conduct detailed market research to understand customer needs, competition, and market trends.

Create a comprehensive business plan outlining goals, strategies, and financial projections.

Complete MSME registration and comply with legal requirements related to permits and licenses.

Explore funding options, including loans, grants, or investors, based on the business model.

Develop effective marketing strategies to reach the target audience and build brand awareness.

5. FAQs on MSME Business Ideas

Identify a viable business idea by assessing personal skills, market demand, and potential profitability.

Legal requirements include obtaining a Udyam Registration certificate and complying with local business regulations.

Explore funding options like bank loans, government schemes, or attracting investors based on the business plan.

Effective marketing strategies include digital marketing, social media presence, and collaborations within the community.

Stay informed about market trends, embrace technology, and be agile in adjusting business strategies.

Governments often offer schemes providing financial assistance, subsidies, and incentives to promote MSME growth.

Scaling up involves strategic planning, efficient operations, and exploring new markets or products.

6. Challenges and Solutions for MSME Entrepreneurs

Explore diverse funding sources and maintain a robust financial management system.

Invest in effective marketing strategies and build a strong brand presence.

Stay informed about regulatory changes and ensure compliance through regular audits.

Embrace technology to enhance operational efficiency and stay competitive.

7. Tips for Success in the MSME Sector

Stay updated on industry trends, new technologies, and business management practices.

Build a strong professional network through industry events, forums, and collaborations.

Be adaptable to changes in the business environment and proactively seek opportunities.

Maintain financial prudence by budgeting, monitoring expenses, and investing wisely.

8. Case Studies of Successful MSME Ventures

Highlight real-life success stories of MSME entrepreneurs who overcame challenges.

Extract valuable lessons from case studies to inspire and guide aspiring entrepreneurs.

Embarking on an MSME venture requires a combination of creativity, resilience, and strategic planning. This comprehensive guide equips aspiring entrepreneurs with the knowledge, insights, and inspiration needed to navigate the dynamic world of MSMEs successfully.

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How to create a business project report to get an SME loan

Before you begin your search for an SME loan for a specific project and commit to an application, you need to create a detailed project plan covering every crucial aspect of your business.

What is a project report, and what should it have?

Why do businesses start new projects, what should be in the presentation to apply for project finance, 1. background of the business, 4. the company aims including the purpose for the loan, 5. project background and the progress to date, 6. market analysis, 7. financial analysis, 8. operational and financial plan.

A comprehensive report outlining why you want the loan, what it’s for, how much, and over what term will encourage lenders to view your professional approach with the right level of consideration.

We will highlight all the criteria you need to include in the project report to ensure your application has the best chance of success.

Once you’ve compiled all the information, you’ll be ready to apply through us.

A project report serves as a master plan. It gives focus and illustrates the feasibility of the project. It can predict future needs and help to guide decision-making while laying the groundwork to request financial assistance.

The project plan should focus on your target market while outlining your business strategy. It’s also best to concentrate on techniques and USPs (unique selling points) that present you in a different way from your competitors.

It’s important not to lose sight of the specific reason you want the loan, and this is where the project report differs from an overall business plan. However, items such as up to date management accounts and directors’ details still need including in the information. 

It’s natural to be impatient in business. Still, you need to be realistic, and sometimes ambition needs to be tempered because if you lower your expectations initially, you might avoid expensive mistakes. Besides, replicating your strategy could be easier if you’ve already experienced partial and modest success. 

No one can afford to be complacent in business, if an operation stands still, it can fade away. The main reason businesses begin new projects is to expand and increase profits. If a business needs profits for sustainability, they have to search for new markets and new customers continually.

As an example of a project that might require finance, let’s say you’re a small independent pizza maker with an excellent local reputation. Can you start a delivery service (after setting up a website that links with major food apps) by employing part-time drivers and scooter riders?

Expansion into other products or a new industry (linked to your current activities) is another reason to consider financing a new project. Using our pizza maker example, can you extend your delivery to include other food outlets if you build up a fleet of drivers or expand your range beyond pizzas, drinks and sides?

Could you become a courier or taxi service when the takeaway orders have a lull? If carefully controlled and the risk minimised, such changes to your original business can be easily managed.

Woman creating a business project report

There are critical elements to have in the project report, including:

Background of the business

Specify the project

List the employees involved in the project

The company aims, including the purpose of the loan

The project aims and progress to date

Market analysis

Financial details

Operational and financial plan

It’s important not to get too deeply involved in explaining the history of the business because your latest management accounts, including the balance sheet and profit & loss, will illustrate the overall financial health of your business. Prospective lenders want to see your clarity of purpose, so focus briefly on your success to date, on what you want the loan for and prove how the project will add value to your operation.

2. Specify the project

The project could be construction , equipment leasing , new product development, research, etc., and this is where you need to get very granular in your details. 

For example, if you want to finance a construction project, actual precise costs would be far better than rough approximations. Similarly, several detailed quotes would be advisable; this proves you’re working hard to ensure you’re squeezing the best value you can out of the possible funding.

3. List the employees involved in the project

You might stand a better chance of getting the funding if you, your fellow directors/shareholders and certain employees have experience in the sector you’re looking to finance. 

For instance, listing the employees or directors’ credentials is essential if the project involves new product development. As a team, if you can prove that you’ve overseen such successful novel projects before, this might sway lenders.

Suppose you and your colleagues managed other projects earlier in the business’s history, completed on time, within budget and the results added value. In that case, this might also generate confidence that managing a complex process is not new to you.

Let’s imagine you’re a small restaurant chain investing in a new range of commercial quality cooking facilities at each site, and industry experts must do the installation. You’ve found the new equipment you want for your premises and obtained a competitive quote from the fitters. 

You now need to replace the old equipment with the latest and limit the downtime and lost revenue to an absolute minimum. Therefore, you should specify just how long the complete process will take and detail any gap or loss of income. This timeline is essential to your project report.

You then begin to outline when the investment in the new equipment starts to increase takings and profitability. Can you serve more customers quickly and with better quality food? Due to the installations, will you cater for more covers at each sitting? 

Highlighting your progress as a business so far while stressing how the new investment will reap the rewards helps reveal your motivation and ambitions and proves you’ve reached the previous goals you’ve set.

Like a startup business plan, you must include market analysis in your project report if you’re hoping to borrow funds; this will prove you’ve done your homework and understand the competition. The study should include items such as who your current and potential customers are and how you’ll reach them.

Marketing your business online through paid banner ads or social media activity must be explained and budgeted. Any offline marketing initiatives should also be accounted for in your project plans. Clearly show the link between your marketing efforts, the costs and potential rewards.

Generally, established businesses apply for SME loans to get projects financed; as such, they should have their financials ready for inspection. For example, limited companies who’ve operated for approximately two years should have filed their first set of accounts. Moreover, management accounts, including an up-to-date profit and loss statement, should be available at the shortest notice.

The latest management numbers will differ from the most recently filed statements at Companies House if you’re a limited company, but both sets reveal a current snapshot of the business’s performance. 

Whether you’re running a limited company or operating as a sole trader, the latest HMRC payments you’ve made can also show the overall health and efficiency of the business.

A cash flow statement can perfectly illustrate your ambitions for the business over the medium and long term. Measured over 1-3 years, this projection, when matched with your other financial details, helps create a comprehensive and professional image with the lenders you approach. 

You can clearly show where the project spending is justified in the forecast; when does the break-even of the loan become clear? The cash flow itemises the capital loan repayments, and if you’re hoping to take the loan for five years, it might be worth covering that entire term in your figures.

So once you’ve worked your way through the above elements and got all your bases covered in your comprehensive business project plan, you’ve put yourself in an excellent position to apply for SME project finance. That’s when our team of dedicated Business Finance Specialists at Funding Options come into the picture. 

We’ve helped over 10,000 businesses across the UK and Netherlands to secure over half a billion pounds of funding, and we’d like to help your business achieve its plans.

Head of Unsecured Lending

Joe has worked in the alternative lending space since 2015. During this time he has helped hundreds of SMEs access millions in essential funding ranging from long-term asset-backed lending to short-term unsecured revolving credit lines and beyond. In his role, Joe manages and supports a large team of Credit Finance specialists.

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A detailed project report is a complete document which provides details on the overall picture of the proposed business/venture. A detailed project report is a final, appraisal report on the project and it provides details of the basic programmes, roles and responsibilities and all the activities to be carried out and the resources required and possible risk with recommended measure to counter them. It consists of information on economic, technical, financial, managerial and production aspect. It enables the entrepreneur to know the inputs and helps him to obtain loans from banks and financial institutions. The project report contains detailed information about Land and buildings required, Manufacturing Capacity per annum, Manufacturing Process, Machinery & equipment along with their prices and specifications, Requirements of raw materials, Requirements of Power & Water, Manpower needs, Marketing Cost of the project, production, financial analyses and economic viability of the project.

Why Buy our Project Report ?

Our approach.

A detailed project report is a final, appraisal report on the project and it provides details of the basic programmes, roles and responsibilities and all the activities to be carried out and the resources required and possible risk with recommended measure to counter them. It consists of information on economic, technical, financial, managerial and production aspect. It enables the entrepreneur to know the inputs and helps him to obtain loans from banks and financial institutions.

• Introduction / Executive Summary
• Product Detail with Manufacturing Capacity
• Use of Product with demand in market
• Market Scenario
• Manufacturing Process and Flow Chart
• Statutory Approval Requirements
• Cost of project
• Means of Finance

Detail Project Report Content Following Information

• ivil Work Requirement
• List of Plant & Machinery
• List of other Equipment/Assets
• Working Capital Assessment
• Projections Assumptions
• Projected Profitability Statement
• Projected Balance Sheet
• Projected Cash Flow
• Term Loan repayment Schedule
• Depreciation Schedule
• Key Ratio Analysis
• SWOT Analysis

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Unlocking growth in small and medium-size enterprises

Sluggish productivity growth is one of the biggest threats to overall economic growth in developed and developing economies alike, with serious implications for citizens’ well-being such as lower income growth, increased inequality, and challenges with loan repayment. In recent years, productivity growth has stalled in many places; a 2018 McKinsey Global Institute (MGI) study of seven Organisation for Economic Co-operation and Development (OECD) countries found a drop in average productivity growth , from 2.4 percent per year between 2000 and 2004 to 0.5 percent per year between 2010 and 2014.

Small and medium-size enterprises (SMEs) contribute to the productivity problem. Within the same sector or within countries of similar size, the productivity gap between large companies and SMEs can vary by a factor of two or more. In construction, for example, McKinsey research found that the productivity gap between SMEs and large companies is 26 percent in France, 41 percent in Germany, and 54 percent in Italy. In the food-services and accommodation sector, the gap is smaller for Italy, at 29 percent, compared with 39 percent for France and 41 percent for Germany. These productivity differences reach 60 percent in Turkey and 80 percent in Greece in many sectors. And a large share of the world’s population works for an SME—between 50 percent and 90 percent of the labor force, depending on the country. 1 For example, Canada, Korea, and China have more than 80 percent of private sector employees working in SMEs, according to OECD enterprise statistics.

Improving the productivity of SMEs is therefore a worthwhile endeavor. Indeed, SMEs can spur a country’s growth for two reasons. First, integrating proven practices and technologies is faster and safer than testing new ones, and SMEs have a large adoption gap to close. In the same way that emerging markets can grow faster than high-income markets by adopting tested technologies, SMEs can grow faster than large companies by adopting the proven technologies and practices of larger enterprises. Second, start-ups, which are a critical subsegment of SMEs, have become important sources of innovation. Because they are unhindered by legacy systems and outdated strategies, new market entrants are often able to rethink established practices and cut through traditional industry boundaries.

Halving the global productivity gap between SMEs and large companies would amount to about $15 trillion in corresponding value added, or roughly 7 percent of global GDP. 2 Based on the weighted average of the productivity gap between SMEs and large companies for countries where OECD data are available. The weight used has been the number of SME employees in each country. Ireland has been excluded as an outlier due to large companies establishing regional headquarters in Ireland and shifting profits for tax purposes, showing an artificially high productivity gap between SMEs and large companies of over 70 percent. Governments around the world can and are helping close this gap through ten approaches tailored to meet SMEs’ most pressing needs.

The need for a thriving ecosystem of small and medium-size enterprises

When enabled by a business-friendly environment and open markets, large companies can thrive; meanwhile, SMEs have a broad range of unmet needs. The limited size of many SMEs means they have difficulty accessing capabilities and resources that would make them more productive, including talented individuals with the latest knowledge of technology, finance, and managerial practices.

Furthermore, many SMEs are young enterprises, which, when combined with their small scale, makes them a weaker counterpart for many standard market players, not only in terms of funding access but also for customers who might perceive small suppliers as too risky. Nonstandard market players such as crowdfunding platforms and venture-capital funds are still in the early stage of development in many OECD countries and often cannot fulfill the needs of SMEs.

Given the challenges facing SMEs and the size of the opportunity, most G-20 countries have created a national agency fully or primarily focused on supporting their growth. 3 India, Indonesia, and South Korea have established dedicated ministries to support SMEs. Other countries have established entities and agencies with the same purpose: Saudi Arabia established the General Authority for Small and Medium Enterprises, the United States has the long-standing Small Business Administration, and countries such as Canada and France have development banks mandated to develop the SME ecosystem. However, operating these government agencies is challenging for the same reasons that markets have struggled to meet SMEs’ needs: their small scale and diversity of circumstances.

Our research, analysis, and experience working with SMEs and SME-development agencies suggests that governments and nongovernmental organizations (NGOs) seeking to serve SMEs’ unmet needs would benefit from two actions: first, understanding and improving the SME ecosystem and second, pursuing a targeted approach to serving various SME subsegments.

Specifically, they should focus on promoting three characteristics of a healthy and well-performing SME ecosystem: boosting the business confidence of SMEs, enabling the growth of SMEs—in general and for high performers—and increasing the competitiveness of SMEs (Exhibit 1). Establishing these three characteristics requires a segmented execution approach. It is therefore important that government agencies design their menu of services after identifying the subsegments prevalent in their country and the differences in their needs. We have identified ten approaches that are used across the world to help meet these needs.

Identifying and prioritizing SME subsegments

In our experience, SMEs typically fall into one of six categories: early-stage innovative start-ups, established successful start-ups, growing medium-size companies, stagnant or struggling medium-size companies, locally focused small businesses, and informal microbusinesses (Exhibit 2).

While it is important to consider the totality of all SME subsegment needs, we believe that SME-development agencies should focus their limited resources on those with the highest potential for impact, with programs tailored to their specific situations.

Medium-size companies are often priority subsegments. According to our analysis, even though medium-size enterprises make up only 2 percent of all companies, they account for about 30 percent of GDP and employment in most countries.

This can vary by country, of course. A country such as India, for instance, has a low urbanization rate, with hundreds of millions of people employed in the informal sector or in small businesses in rural areas. It is difficult to neglect these segments in India; however, a highly urbanized country with a lower level of informality could have a more targeted approach and focus only on innovative start-ups and medium-size companies.

A country’s economic-development strategy should therefore guide the prioritization. For example, if export growth is a priority, medium-size companies operating in tradable goods and services could take precedence. While such ranking can be difficult, scattering resources among too many recipients may severely diminish their impact.

Providing the right levels of support to small and medium-size enterprises

Government agencies and NGOs with a good understanding of SME subsegments can better tailor their programs to meet SMEs’ unmet needs. We have researched SME support programs across the world and categorized them into a matrix of ten approaches. Some are tailored to a single subsegment while others address one of the six unmet needs for all or most subsegments (Exhibit 3).

For all these categories, the specifics of how they are implemented matter; therefore it is difficult to draw universal best practices from them. However, it can be instructive to consider the following ways these programs are helping to close the productivity gap for SMEs.

Entrepreneurial culture and education

Besides institutions, regulations, and facilities, the attractiveness of an entrepreneurial career and citizens’ entrepreneurial capabilities are also important in increasing the development and survival rates of start-ups. Many ideas are never prototyped or converted into a business plan. Risk aversion, fear of failure, and lack of capabilities can be just as significant barriers as lacking the regulatory and institutional support. Several governments have attempted to develop an entrepreneurial mindset among their citizens.

Inculcating entrepreneurial skills through formal education is often part of the solution. Poland, for example, teaches elements of entrepreneurship in primary-school core subjects, such as history and math, and upper-secondary students are required to take “Introduction to Entrepreneurship.” 4 Entrepreneurship education in Poland , School Education Gateway. August 2015, schooleducationgateway.eu.

Entrepreneurial education is also thought to promote equity, and many organizations have focused on developing an entrepreneurial mindset and capabilities in young residents of low-income communities. In the United States, for example, the Network for Teaching Entrepreneurship (founded in 1987) delivers multiple entrepreneurial programs and extracurricular activities through 1,882 partner schools. The programs have reached more than 23,000 students across states and approximately 50,000 more internationally. Additionally, 75 percent of the network’s alumni have enrolled in college and 25 percent have started at least one business. 5 2018 Annual report: Preparing the next generation—youth entrepreneurship and the future of work, Network for Teaching Entrepreneurship, January 2019, nfte.com.

Start-up hubs

Entrepreneurs around the world have chosen major start-up hubs to launch their enterprises, seeking an innovative environment, access to financing, and business support. Many governments have prioritized turning one or more of their cities into a start-up hub, by either branding the city as a start-up hub or supporting start-up campuses. As governments attempt to enable or develop start-up hubs, they can focus on some of the toughest challenges entrepreneurs typically face—navigating the administrative requirements to start and run a company, accessing the competencies needed to run a business, and being able to afford the launch of a start-up as well as the costs of living in a start-up hub.

In the 1960s, federal laboratories settled in Boulder, Colorado, and partnered with the University of Colorado to fund and conduct research on energy, environment, and climate topics. Since then, the city has established numerous important assets, including leading research institutions. Boulder currently boasts 12 active start-up accelerators and incubators.

Moreover, the Colorado Office of Economic Development and International Trade (OEDIT) works closely with the governor of Colorado to offer financial support services—including grants and tax incentives—to selected start-ups. The OEDIT also hosts the Colorado Small Business Development Center Network, which provides technical business support through mentorship, consulting, and training.

Today, Boulder ranks as one of the best 30 start-up ecosystems globally. 6 Global startup ecosystem report 2019 , Startup Genome, May 9, 2019, startupgenome.com. Companies in the tech sector employ 9.7 percent of Colorado’s total workforce and make up 14 percent of its economy. 7 “Colorado tech workforce added 6,500 jobs in 2017, boosted contribution to state’s economy,” CompTIA, March 27, 2018, comptia.org.

Government venture-capital funds (GVCFs)

Government funds for start-ups first appeared in Europe following World War II. Today, governments in high-income countries are paying more attention to the start-up sector, hoping to boost innovation and stimulate economic impact through venture capital (VC). Setting up a GVCF can contribute to this objective while also providing adequate financial returns for the government. Some ecosystem prerequisites can increase the impact of a GVCF, including a well-developed capital market to maximize exit options (for example, secondary stock market, later-round exits, strategic acquisitions, and openness to foreign ownership).

One important component of a successful government-led ecosystem is the ability to attract investors from the private sector. In many cases, public investment in VC crowds out private-sector investors, given that GVCFs often have more leverage and access to funds as well as limited accountability on costs (see sidebar “The Business Development Bank of Canada: Activating the Canadian VC industry and initiating a growth-driver scale-up program”). A GVCF’s design can also influence its success in important areas such as aligning GVCF objectives with national development goals and aligning the fund governance and operations with its mandate and investment strategy.

The Business Development Bank of Canada: Activating the Canadian venture-capital industry and initiating a growth-driver scale-up program

The Canadian government established the Business Development Bank of Canada (BDC) in 1944 and repurposed its mandate in 1995 to support the growth of Canadian entrepreneurs and start-ups. It serves as an example of a successful government venture-capital fund and scale-up program.

Venture capital (VC)

The investment arm of BDC, BDC Venture Capital, shows that government VCs can be profitable while spurring economic development. As of December 2017, BDC Venture Capital had invested more than $500 million in their portfolio companies and exited 95 investments; companies BDC invested in had raised about $4 billion by 2017 and created more than 5,800 jobs. 1 “Higher number and greater diversity of entrepreneurs now calling on BDC for financing and advice,” Business Development Bank of Canada, July 26, 2018, bdc.ca.

BDC Venture Capital employs two approaches: active direct investment and passive investment in various funds through BDC capital fund investments and BDC capital direct investments. The approaches have different investing processes and commitment levels from an investment board that oversees and assures high quality of investments. Beyond typical investment activities, BDC Venture Capital offers investees several support services, including networking with experts, training sessions, and seminars to develop their VC-fund capabilities.

BDC has also succeeded in two important ways. First, it created a healthy deal flow. A relatively broad focus toward healthcare, IT, industry, and energy has allowed for a pool of high-quality deals. The core team of BDC Venture Capital prioritizes investments in start-ups established mostly in Canada, on the condition of having a solid business model, a clear competitive advantage, and management with an entrepreneurial spirit.

Second, BDC Venture Capital has been able to attract talented VC professionals. One of BDC’s latest strategies to attract talent has been the option to spin off internal funds to talented managers. In the 2018 strategy release, BDC announced the spin-off of the Information Technology Fund, letting the two partners comanaging the arm lead the new independent fund, Framework Venture Partners. That fund ultimately raised $100 million, half of which is matched by BDC Capital. The model provides a significant career opportunity for talented investors and bolsters the quality of the Canadian VC ecosystem.

Scale-up program

BDC established its Growth Driver Program in 2016 to help high-potential domestic firms overcome common challenges and barriers to scalability. The program aims to harness BDC’s internal expertise and professional network to place entrepreneurs at the center of a multidisciplinary support system that guides SMEs through each phase of enterprise growth, driving economic growth and supporting job creation. Since the program was founded, it has supported more than 140 businesses with combined revenues of $4.7 billion. 2 All figures from Canada’s BDC case study are in Canadian dollars.

Companies must formally apply to the Growth Driver Program, providing information regarding their financial performance and internal skills and team capabilities along with the key growth challenges. If they are selected, they will be offered to invest money in the program to showcase commitment. The money spent kicks off a two- to three-year program during which the business is given professional and developmental support from the BDC core team and dedicated consultants, who work with the companies to optimize their growth strategies, financing structures, and internal controls.

Meanwhile, senior leaders are enrolled in courses at top executive training schools. At its core, the program seeks to accelerate growth trajectories by injecting and transferring BDC’s knowledge of industry best practices, enabling them to avoid the organizational flaws that typically limit SME expansion.

The initiative is industry agnostic and targets medium-size businesses that are deemed potentially high impact. These firms have a minimum of $15 million in revenues, strong management, and feasible growth plans that can be quickly rolled out. BDC deploys public resources only on businesses that are intrinsically robust enough to generate sustainable returns at scale but lack the required experience and executional expertise to do so alone.

The South Korean government, for example, founded the Korea Fund of Funds as part of the Special Measures for the Promotion of Venture Business Act in 2005 with the purpose of providing stable capital for the venture-investment ecosystem. The $2.8 billion fund has a passive investment strategy, focused mainly on seed- and early-stage start-ups. The fund has made approximately 6,000 investments in start-ups and 722 investments in other funds to date, with total fund size growing from 1 trillion won (approximately $840 million) in 2009 to 4 trillion won in 2018.

Following the development of the Korea Fund of Funds, the government established four more dedicated funds: to invest in growth-stage SMEs with high job-creation potential, to support and coinvest with angel investors and minimize equity gaps for start-ups, to finance technology SMEs, and to create a foreign VC fund to support South Korean start-ups that plan to operate overseas.

The South Korean government created a large database and network of angel investors. All funds are invested only in South Korean companies to ensure local development of the start-up segment and the venture capital industry without focusing on any specific sector and are managed by a third party, the Korea Venture Investment Corporation. The South Korean government witnessed a 178 percent increase in seed deals through coinvesting with private players in early stage start-ups.

By measures such as share of GDP, South Korea’s VC investments are the fourth largest of the OECD countries, behind only Israel, the United States, and Canada. At 0.36 percent, its VC investments more than doubled between 2010 and 2017 while other OECD countries’ VC investments declined significantly. 8 OECD data highlights that VC investment increased from $527 million in 2010 to ~$1.9 billion in 2018; Kim Gang-rae and Lee Eun-joo, “S. Korea’s venture investment accounted for 0.36 percent of GDP in 2018: private council,” Pulse, June 5, 2019, pulsenews.co.kr. A notable sign of success for the government-led initiative is the 9 percent increase in private-sector VC investments due to participation by crowding in investors, which corresponds with a greater number of VC firms and investment managers. 9 Taehyun Jung and Jonghoon Lee, “Policy-driven expansion of venture capital industry: An empirical examination of contexts, factors, and effects behind the recent surge of Korean venture capital industry,” Academy of Entrepreneurship Journal, 2017, Volume 23, Number 1, abacademies.org.

Scale-up programs

Many governments have launched scale-up programs that help medium-size businesses unlock their potential and grow faster. Some programs provide comprehensive support, facilitating SMEs’ access to finance, networking, consulting, and mentorship. Others follow a more targeted approach, focusing on specific sectors or predefined support services (see sidebar “The Business Development Bank of Canada: Activating the Canadian VC industry and initiating a growth-driver scale-up program”).

TURQUALITY, a state-funded scale-up program in Turkey that was launched in 2004, is led jointly by Turkey’s Ministry of Trade and the Turkish Exporters’ Assembly. The program aims to support promising Turkish companies with strong brands, established business capabilities, and high economic potential—to ultimately transform top Turkish businesses into global players that have well-known global brands and generate high value-added exports.

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The program is open to all Turkish companies, which must apply online and undergo an on-site inspection of their performance by the ministry and accredited evaluators. At the end of this assessment, each applicant receives a score along with a well-documented report on their current performance and development areas. Companies with mature business processes and capabilities, high brand value, and a certain level of exports are accepted into the program and become eligible for support. Primary areas of support include international brand building activities, overseas store openings, talent acquisition, and large-scale corporate transformation projects.

TURQUALITY initially focused on the textile and ready-to-wear sectors, which have a clear competitive advantage and high branding potential. Ultimately, the program expanded to other manufacturing and service sectors. The program has supported more than 300 companies across about 20 industries that now generate more than 5 percent of Turkey’s exports, make branded exports to more than 150 countries, and have achieved double the export trade value compared with the national average.

Productivity programs

Using a model akin to scale-up programs, governments have also launched support programs that aim to enhance and accelerate the productivity of SMEs. In these programs, expert coaches in operational excellence and capability building help participating medium-size companies gain awareness of best practices and translate them into customized improvement initiatives. Many such programs rely on lean management practices , as well as on model factories, facilities that are optimized with the most efficient operational practices and latest technologies—providing SME employees a hands-on learning environment.

In Morocco, for example, the government launched a model factory in 2011 to help SMEs adopt the latest lean manufacturing principles through experiential training. The initiative, the Moroccan Micro-enterprise Support Institution (INMAA), was established with an investment of 20 million dirhams (approximately $5.5 million) by public institutions, financial institutions, and private-sector players. 10 “INMAA, a model factory for Moroccan SMEs,” Invest in Morocco, May 6, 2011, invest.gov.ma. INMAA aims to enroll 100 SMEs annually for a six-month program in which change agents spend a few days each month at the model factory for theory and practice modules, with the remainder of the month spent implementing the lessons learned.

The program starts with a diagnostic phase in which participants evaluate their current operations. The second phase involves the participants and experts envisioning the ideal future state. The implementation phase takes three months and equips change agents with the essential lean-manufacturing tools while practically implementing them in their own operations. The experts from the model factory continue to advise and guide change agents and conduct field visits to assess and aid the overall transformation, even after the participants graduate.

To date, INMAA has trained 650 change agents from 340 SMEs across seven sectors—achieving a 40 percent increase in productivity of participants on average. The program aims to transform the top 800 SMEs in Morocco, achieving a 25 percent increase in productivity. 11 “INMAA,” accessed March 3, 2020, inmaamaroc.ma.

Digital and artificial intelligence (AI) adoption programs

The MGI has estimated an increase of productivity growth from digital adoption of 1.2 percentage points per year for some countries, representing the main contribution to productivity growth overall. Much of the impact relies on or is enhanced by AI applications . For SMEs, the theoretical opportunity is likely higher, but the corresponding implementation challenges are also more difficult.

Limited awareness of AI, limited access to digital talent, and limited capital to invest in AI applications can significantly hinder the uptake of these technologies by SMEs. Governments have started expanding their productivity programs toward digital adoption or setting up dedicated programs to help SMEs deploy AI technologies in their processes and products. Similar to productivity programs, digital- and AI-adoption programs also rely on centers of excellence and model factories for demonstrations. These programs depend on an ecosystem of different players and professionals to enable SMEs to deploy AI in their companies. The Mittelstand 4.0 centers of excellence in Germany, for example, are the first of 26 AI competence centers, staffed with 20 AI coaches to train 1,000 SMEs each year. 12 “Artificial intelligence strategy,” German Federal Ministry of Education and Research, Federal Ministry for Economic Affairs and Energy, and Federal Ministry of Social Affairs, November 2018, ki-strategie-deutschland.de.

In Finland, the Ministry of Economic Affairs and Employment and several technology industries have launched an accelerator dedicated to helping firms deploy AI. The accelerator offers six-month programs for companies that have already piloted an AI application on products or services. About 15 Finnish companies provide funding and technical support to the accelerator. In an initial phase, companies benefitting from similar AI use cases are batched together. Then, these organizations work with service providers, AI start-ups, and academics in short sprints to develop and deploy the AI applications to their processes or deliverables. The first batch of companies from the accelerator, for example, worked together to deploy Finnish speech-recognition technologies. 13 Leading the way into the age of artificial intelligence: Final report of Finland’s Artificial Intelligence Programme 2019 , Finland Ministry of Economic Affairs and Employment, June 12, 2019, julkaisut.valtioneuvosto.fi.

Setting up small and medium-size enterprises for restart and recovery

Over the years, Singapore government agency Workforce Singapore has launched a series of productivity-enhancing programs to help medium-size companies adopt lean management practices as well as digital and Industry 4.0 technologies. One such program uses a field-and-forum approach, which alternates between forum sessions and in-field application. During the forums, SMEs come together to understand the fundamentals behind lean and Industry 4.0 adoption and experience the impact on a model factory at the Digital Capability Center Singapore. They then apply these lessons in the field for a few weeks, supported by lean and digital experts, and exchange observations during the follow-up forum. This process allows companies to identify opportunities for improvement and implementation at their facilities. Moreover, SMEs will learn how to roll out progressive human capital practices and job redesign to augment their transformation.

To date, this Workforce Singapore program has been deployed successfully across multiple sectors, including food and beverage, hospitality, manufacturing, medical technology, and precision engineering. For example, ten precision engineering SMEs have participated in an Industry 4.0 transformation and job redesign program to enhance human capital and productivity. The 20-week program involved approximately 150 change agents and resulted in a 40 to 70 percent increase in machine and manpower productivity as well as an improved workplace environment. 14 Based on an interview with Digital Capability Center (DCC) Singapore.

Local complementary currencies

Numerous NGOs and private-sector players have attempted to launch a local complementary currency restricted to a certain community (see sidebar “The 85 years of the Swiss WIR franc”). It could be as large as Switzerland (which has the WIR franc) or Sardinia, Italy (Sardex), or as small as the Bangladesh community in Mombasa, Kenya (Bangla-Pesa). Thousands of local currencies—which are typically digital-only and pegged to the legal tender—have emerged in areas where the legal tender and its connected monetary policies cannot provide enough credit to small businesses or enough purchasing power to local consumers.

The 85 years of the Swiss WIR franc

Started in 1934, the WIR Bank is a complementary currency system in Switzerland that serves mainly hospitality, construction, manufacturing, retail, and professional services SMEs. Its original goal was to stimulate trade within its representative community (which now includes more than 50,000 businesses, almost 20 percent of all enterprises in Switzerland); more than 1 percent of the Swiss GDP is exchanged in WIR francs.

Research by economist James Stodder shows that the WIR creates a countercyclical tendency in the economy: during financial crisis, when the availability of legal tender contracts, trade in the WIR network increases and hence enables SMEs to avoid a severe downturn in profits and annual turnover. Despite the small absolute volume of the WIR franc in comparison to the national Swiss franc economy, this effect proved statistically significant.

The unit of account of the WIR franc is the Swiss franc: one always equals the value of the other. What’s more, no physical WIR francs are printed or minted—WIR credit is purely electronic. And WIR francs enter into circulation when being lent by the bank to an account holder, as with any other legal tender.

All participants sign up for a membership and start with a balance of zero, and all participants can buy from one another. The banks’ software keeps score of everyone’s balance, and the WIR website works as a marketplace for people and companies that want to buy and sell in WIR francs. However, not all suppliers accept 100 percent payment in WIR; combined payments—in which goods and services are paid for in part by cash and partly in complementary currency—are more common. Members agree to accept at least 30 percent of the payment in WIR francs. 1 Those who accept receiving more than 30 percent in WIR francs are known as “official members,” though there are many who accept up to 50 percent. Those who cannot guarantee the acceptance of at least 30 percent are considered “unofficial members”; since it is not necessary to publish this data, there are a number of “undercover” members.

The organization levies a fee of about 0.1 percent on every transaction and charges interest on overdraft facilities and loans, typically below 2 percent. 2 “The WIR ‘schafft es’, already more than 80 years,” European Business Review, September 10, 2018, europeanbusinessreview.eu; Institute of Social Currency, “The WIR, the supplementary Swiss currency since 1934,” in Bitcoin , The Economy Journal, accessed March 3, 2020, theeconomyjournal.eu; Thomas H. Greco, Jr. and Theo Megalli, “An Annotated Précis, Review, and Critique of WIR and the Swiss National Economy,” accessed March 3, 2020, reinventingmoney.files.wordpress.com.

Given that producers within the community are also consumers, a local currency can increase both the volume of transactions and the utilization of resources. Users can use this currency to settle payments between SMEs in the community. The community nature of the plan limits the need for credit scoring, which happens before an SME or individual is allowed in the network. The plan charges a one-time fee or small interest on negative balances. Most of these currencies have a proven record of a statistically significant expansion of credit and sales volumes, even though they tend to remain small scale. 15 Sara Calvo and Andres Morales, Exploring complementary currencies in Europe: A comparative study of local initiatives in Spain and the United Kingdom , Living in Minca, September 2014, livinginminca.org. Governments at all levels could consider complementary currencies as an inexpensive vehicle to stimulate demand and credit for local businesses, helping them increase their sales, investments, and ultimately, productivity and profits.

Formalizing informal businesses

Government intervention can abate the three main barriers to business formalization: high cost of becoming formal, high cost of compliance, and insufficient perceived (or actual) benefits. Many governments have mobilized in this direction along several touchpoints:

• Business registration. Facilitating the registration process and lowering associated cost could improve not only formalization levels but also the overall business environment. For instance, Thailand has reduced the time it takes to start a business from 27.5 days to 4.5 days via simplifications such as removing unnecessary requirements and reducing fees. 16 “Ease of Doing Business rankings 2018,” Doing Business, World Bank Group, accessed March 3, 2020, doingbusiness.org. And Estonia’s e-Residency policy allows any entrepreneur around the world to register their business in Estonia—thus gaining access to local banking, payment platforms, and the entire EU market—without having to physically enter or visit Estonia. Since the launch of the policy, more than 60,000 e-residents have created more than 10,000 companies and generated more than €25 million in taxes.
• Tax registration and structure. Simplifying tax structure, tax registration, and returns filing has helped formalize SMEs. Again, Estonia introduced a flat tax rate and a platform for e-registration and filing returns; nearly all tax amounts are calculated online by the application. The result was that 98 percent of all taxes (personal, corporate, and value-added) are now filed electronically—among the highest compliance rates in the world.
• Examination and audit. With a growing digital footprint and availability of innovative data analytics, governments are using data to identify informal businesses. Turkey has created an extensive e-invoice, e-archive, and e-audit system that resulted in thousands of new taxpayers across sectors. 17 “Product tracking system,” Informatics and Information Security Research Center, accessed March 3, 2020, bilgem.tubitak.gov.tr.
• Support to registered businesses. Some governments offer incentives or rewards for formalization. As a part of the Colombia se formaliza program in Colombia, the Fondo Nacional de Garantías facilitates access to formal credit by offering loan guarantees. And Sweden encourages formalization among some categories of self-employed people, such as those who lack a formal contract but are paid by an organization—a common arrangement for services like food delivery, driving, or software development. They do so by requiring a parent company to employ these workers and pay for social-security contributions.
• Awareness and education. Among the biggest challenges in the informal sector is ensuring that SMEs have correct and complete information regarding the process, benefits, and penalties. In 2013, The Colombia se formaliza program reached 80,000 entrepreneurs a year, raising awareness and offering personal assistance to formalize their business operations, with 40 percent accepting to formalize. 18 Policies for the formalization of micro and small enterprises in Colombia , International Labour Organization, 2014, ilo.org.

Credit-guarantee schemes

On average, 40 percent of SMEs in the world are unserved or underserved when it comes to banking credit. 19 MSME finance gap: Assessment of the shortfalls and opportunities in financing micro, small and medium enterprises in emerging markets , joint report by World Bank Group and International Finance Corporation, 2017, ifc.org. Some subsegments are too risky for banks’ appetites while other subsegments have access to loans that have higher interest rates than their true risk profile. In reality, SME loans are often more profitable for lenders than large-firm loans.

A widely used program to resolve this is a credit-guarantee scheme (CGS), which aims to reduce the cost of potential defaults by guaranteeing part of the repayment of SME loans. CGSs have significantly increased SME credit access, with existing and running public and private credit-guarantee schemes in nearly 100 countries. The Korea Credit Guarantee Fund, one of the largest CGSs in the world, guaranteed a portfolio of loans of approximately $44 billion in 2018. 20 “About KODIT,” KODIT, accessed March 3, 2020, kodit.co.kr. As of 2015 and since its incorporation, the program has issued 205,361 guarantees—about 12 percent of SME loans in Korean banks. Furthermore, Korean CGSs have indirectly supported the increase of SME lending from 35.7 percent (when the agency was established) to 76.7 percent in 2015. 21 “Korean experience in credit guarantee scheme to enhance financial accessibility of MSMEs,” KODIT, May 12, 2017, unescap.org.

SME digital platforms

Several SME-development agencies have created a platform—usually a website—as a one-stop shop to not only access any government service, program, and data but also fulfill government requirements, such as paying taxes. Some websites have additional functionality, including marketplaces for business opportunities, access to data, and links to financial institutions, advisers, and legal services.

For example, UK charity Be the Business has developed an online self-assessment platform that is open to all SMEs and aimed at helping them improve their performance. On the platform, business owners and managers can undergo a comprehensive evaluation to understand their businesses’ current level of productivity relative to peers and receive systematic and immediately actionable advice and guidance. The platform also points business leaders toward other resources, including training programs and networking events, that can inspire improvements and build SMEs’ confidence in their growth.

The most advanced governments have started to provide services through apps with an SME login that gives users customized insights on government offerings and markets as well as tailored recommendations.

As many of these examples show, governments can help SMEs capitalize on growth and productivity-improvement opportunities. But unlocking SME growth is no easy task. Although we presented many success stories, some ventures have proven less successful and signal a need for caution. Careful assessment of benefits, costs, and risks can help identify the initiatives with the highest potential. Most importantly, the potential of SMEs’ growth and increased productivity is great enough that all governments should be paying attention.

Abdulaziz Albaz is a consultant in McKinsey’s Riyadh office; Marco Dondi is a consultant in the Dubai office, where Tarek Rida is an associate partner and Jörg Schubert is a senior partner.

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MSME DEVELOPMENT PLAN

• 2017 Accomplishment Report of MSMED Plan 2017-2022
• 2018 Accomplishment Report of MSMED Plan 2017-2022
• 2019 Accomplishment Report of MSMED Plan 2017-2022
• 2020 Accomplishment Report of MSMED Plan 2017-2022
• 2021 Accomplishment Report of MSMED Plan 2017-2022

MSMED PLAN 2011-2016

MSMED PLAN 2004-2010

• Provide SMEs access to comprehensive and focused support for enhancing managerial and technological capabilities, tapping  business opportunities, and becoming competitive in the local and international markets.
• Provide support for identifying and developing business opportunities through the development of business ideas that promote the expansion and diversification of the country’s industrial structure.
• Strengthen support to the growth industries that are active in the international markets to sustain and enhance their competitiveness and improve their access to the domestic market.
• Provide support for industrial linkages of SMEs with leading Philippine industries to strengthen the country’s industrial structure.
• Develop SME financing support programs and strengthen the institutions that provide direct and appropriate financial services to SMEs.
• Streamline the systems that provide support programs and incentives for SMEs.
• Streamline the implementation of SME policies and regulations.
• Strengthen and build the capabilities of institutions that generate and implement programs for SME development.
• Business and Investment Enabling Environment (BIEE);
• Access to Finance (A2F);
• Access to Market (A2M); and
• Productivity and Efficiency (P&E)

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Elevate Your Entrepreneurial Journey

The top 10 micro, small, and medium enterprises trends for 2024, icsb leadership.

By Dr. Ayman El Tarabishy

President & CEO of the International Council for Small Business;

Deputy Chair of the George Washington University School of Business, Department of Management

Access to Sustainable Finance for MSMEs

In 2024, “Access to Sustainable Finance” emerges as a critical trend, offering a beacon of hope to Micro Small and Medium Sized Enterprises (MSMEs) navigating the complexities of an eco-conscious economy. This trend marks a significant shift in the financial ecosystem as forward-thinking solutions and providers emerge to bridge the gap, offering MSMEs vital access to sustainable finance. This isn’t just about providing funds; it’s about fueling sustainable growth and ethical business practices, enabling MSMEs to leverage green opportunities and thrive in a rapidly evolving economic landscape.

High global interest rates and environmental concerns have presented dual challenges for MSMEs seeking growth while aspiring to sustainability. Innovative financial solutions and providers are now dismantling these obstacles. They empower MSMEs by offering green and flexible financing options that align with their sustainable goals and growth trajectories. This trend cultivates resilience and responsibility among MSMEs, allowing them to swiftly adapt to market shifts and environmental mandates while capitalizing on eco-friendly opportunities.

In 2024, Access to Sustainable Finance is more than a lifeline; it’s a catalyst for sustainable innovation and ethical growth. With this targeted access to capital, MSMEs are equipped to face the challenges of high-interest rates and environmental responsibilities. This trend is unlocking the potential of these enterprises, enabling them to pursue sustainable expansion, green innovation, and market diversification, all while contributing to a healthier, more sustainable global economy.

Tourism and Sports for MSMEs Development and Growth

MSMEs are increasingly capitalizing on the opportunities the tourism and sports sectors presented. Tourism, in particular, offers a wealth of possibilities for local businesses, from hospitality and travel services to unique experiences and cultural offerings. MSMEs are tapping into this potential by providing tailored services that cater to travelers’ evolving needs and preferences.

On the other hand, sports encompass a wide range of opportunities, from sports-related products and services to event management and athletic training. MSMEs are finding innovative ways to engage with the sports industry, capitalizing on sports enthusiasts’ and athletes’ passion and enthusiasm.

In 2024, Tourism and Sports for Development and Growth represent avenues for MSMEs to expand their reach, foster local economic development, and contribute to the vitality of their communities. By aligning with these sectors, businesses can tap into the immense potential for revenue generation, job creation, and cultural enrichment.

Humane Entrepreneurship: Coaching and Mentoring of Employees

In 2024, Humane Entrepreneurship takes its place as the #8 trend for Micro, Small, and Medium-sized Enterprises (MSMEs), following its recognition as #4 in 2023. This trend reflects a growing awareness of the pivotal role of coaching and mentoring in nurturing employees’ potential within these businesses.

Humane Entrepreneurship emphasizes fostering a supportive and empathetic workplace culture. MSMEs recognize that their most valuable assets are their employees, and investing in their growth and well-being is a strategic imperative. Coaching and mentoring programs are gaining prominence as practical tools to unlock the full potential of staff members, enhance their skill sets, and nurture their career development.

By prioritizing Humane Entrepreneurship, MSMEs create a more inclusive and productive work environment and foster employee loyalty and commitment. This trend aligns with a broader shift towards valuing the human aspect of business, ultimately contributing to sustained growth and success in the competitive business landscape in 2024. Tourism and sports take the spotlight in 2024 as the #9 trend for Micro, Small, and Medium-sized Enterprises (MSMEs), following their recognition as #3 in 2023. This trend signifies the growing recognition of the significant role that tourism and sports play in driving development and growth for these businesses.

The Evolution of WomenPreneurs

Empowering women and youth in micro, small, and medium-sized enterprises (MSMEs) continues to be a prominent trend in 2024. This movement began in 2023 when the International Council for Small Business (ICSB) championed the theme of supporting women and youth entrepreneurship and resilient supply chains. Initially met with skepticism, this theme gained profound relevance following Claudia Goldin’s Nobel Prize for her groundbreaking research on gender income disparities, especially in the wake of childbirth.

ICSB’s vision to empower women in entrepreneurship gains momentum, with greater recognition of their pivotal role in the entrepreneurial ecosystem. Claudia Goldin’s Nobel Prize underscores the urgency of addressing gender disparities in the labor market, aligning seamlessly with ICSB’s mission. The journey toward empowering women and youth in the MSMEs sector drives economic progress, societal advancement, and a brighter global future. It calls for collective efforts from international organizations, policymakers, and individuals to ensure sustainable and inclusive development worldwide.

Circular Economy Business Models

In 2024, Circular Economy Business Models will emerge as a top trend for MSMEs, underlining a growing commitment to sustainability and waste reduction. Small and Medium-sized Enterprises (MSMEs) increasingly recognize the importance of aligning their operations with circular economy principles. This trend involves reimagining traditional linear supply chains and product lifecycles to create a more sustainable and environmentally responsible business approach.

One significant aspect of this trend is product design for recyclability, where MSMEs prioritize creating products that can be easily disassembled and recycled, minimizing waste and environmental impact. Additionally, MSMEs are exploring refurbishment and resale programs, extending the lifespan of products and reducing the need for new manufacturing. Collaborations and partnerships (trend #1) with other businesses to reuse and recycle materials are also gaining prominence as MSMEs seek innovative ways to reduce their ecological footprint and contribute to a more circular and eco-conscious economy. In 2024, Circular Economy Business Models are not only environmentally responsible but also present opportunities for cost savings, enhanced brand reputation, and greater market competitiveness, making them a crucial trend for MSMEs to embrace.

Delivery Economy and Agility of MSMEs

In 2024, the “Delivery Economy” stands out as a game-changing trend for Micro, Small, and Medium-sized Enterprises (MSMEs). This trend reflects a significant shift in consumer preferences, where virtually everything is delivered directly to the customer’s doorstep. With an emphasis on convenience, speed, and proximity, the Delivery Economy is transforming traditional business models and presenting unprecedented opportunities for MSMEs.

In this dynamic landscape, MSMEs are like boats, agile and nimble, while big businesses are like massive ships. The agility of MSMEs enables them to adapt swiftly to the demands of the delivery economy. They can provide personalized, rapid, and seamless delivery experiences, meeting the expectations of consumers who prioritize speed and convenience. This adaptability positions MSMEs to navigate and thrive in the fast-paced waters of this trend, capturing new markets and fostering customer loyalty.

In 2024, the Delivery Economy is not merely a trend but a strategic imperative for MSMEs. Those who invest in efficient delivery mechanisms and tailor their offerings to meet the demand for immediate access are poised to outmaneuver more prominent competitors. Like boats on the open sea, MSMEs can harness their agility to compete effectively and maintain competitiveness in an environment where speed and proximity are paramount.

Agribusiness and Agtech for MSMEs

In 2024, Agribusiness and Agtech are some of the top trends for Micro, Small, and Medium-sized Enterprises (MSMEs) in Africa. Agriculture continues to be a cornerstone of the African economy, and MSMEs are recognizing and capitalizing on the immense opportunities within the agribusiness sector. With a growing global demand for sustainable and traceable food production, the agricultural landscape in Africa is ripe for innovation and expansion.

One of the key drivers of this trend is the rapid advancement of agricultural technology, commonly called Agtech. MSMEs leverage Agtech solutions such as precision farming techniques, which optimize crop yields through data-driven insights and innovative farming practices. Furthermore, e-commerce platforms dedicated to farm produce connect local farmers with broader markets, reduce intermediaries, and increase profitability. Additionally, blockchain technology is harnessed for supply chain transparency, ensuring the traceability and authenticity of agricultural products from farm to table.

These innovative developments are transforming the agribusiness landscape and empowering MSMEs to play a pivotal role in addressing Africa’s food security, economic growth, and sustainability challenges. In 2024, the synergy between Agribusiness and Agtech propels MSMEs toward greater efficiency, market access, and environmental stewardship, making it a trend to watch and embrace for sustainable and profitable growth.

Artificial Intelligence and GEN AI

2024, Artificial Intelligence (AI) will become the No. 3 trend, significantly altering the business landscape. AI’s transformative influence reaches across industries, reshaping operations, decision-making processes, and customer interactions. For Micro, Small, and Medium-sized Enterprises (MSMEs), AI represents a powerful tool for data-driven insights, supply chain optimization, and personalized customer engagement, allowing them to compete globally.

One of the most remarkable developments linked to AI is the emergence of GEN AI, a new generation of workers who have grown up in an AI-integrated world. GEN AI possesses a natural fluency with technology and AI-driven tools, making them adaptable contributors to various industries. Their ability to harness AI’s capabilities for innovation highlights the need for MSMEs to invest in AI education and upskilling initiatives, capitalizing on GEN AI’s potential to drive growth and competitiveness. As industries evolve and adapt to AI, the dynamic synergy between human workers and intelligent machines becomes pivotal, setting the stage for a future where AI and GEN AI redefine business rules and shape the destiny of MSMEs globally.

Entrepreneurs Going ALone and SMEs Seeking to Scale

Amidst the ongoing challenges, including the recent Gaza war, it is crucial to emphasize the importance of fostering Peace for Economic Development and Prosperity—our second trend for 2024. Russian Ukrainian entrepreneurs acutely feel the impact of a wartime economy and small business owners, exacerbating the global struggles with soaring natural gas prices and supply shortages like wheat.

In 2016, the International Council for Small Business (ICSB), led by Dr. Ayman El Tarabishy, proposed the idea of a United Nations Day for MSMEs. The vision was to dedicate a day where nations, stakeholders, and companies of all sizes could celebrate the significance of MSMEs as the fundamental building blocks of contemporary society. The proposal underscored that once conflicts cease, micro-, small-, and medium-sized enterprises play a pivotal role in economic reconstruction. MSMEs Day, commemorated on June 27th, was symbolically chosen, signifying the day after the initial signing of the U.N. Charter on June 26, 1945. It serves as a poignant reminder to nations worldwide that MSMEs are essential for solving global challenges and are indicative of a peaceful society.

In times of conflict, the path to prosperity may seem uncertain, but amidst the challenges, there is hope. The global community stands together to champion humanity, and businesses are pivoting their creative solutions to aid those affected by conflict—a collective effort that embodies the right way forward.

MSMEs Forming Collaborative Alliances

The foremost trend for 2024 reshapes the landscape of MSMEs, spotlighting the formation of Collaborative Alliances—an old concept infused with new vitality. It emerges as the #1 Trend for MSMEs, offering a transformative path forward for several compelling reasons. Businesses recognize unity’s undeniable strength in a volatile era marked by economic uncertainties and disruptions. Like Davids facing Goliath-sized challenges, MSMEs are now uniting as millions of Davids, pooling their resources, expertise, and market insights to form a formidable force. This collective strength empowers them to negotiate better terms, access untapped markets, and navigate market fluctuations with greater resilience than they could achieve as solitary entities.

Collaborative Alliances go beyond resource consolidation; they nurture a culture of innovation and cross-pollination of ideas. Within these alliances, members bring complementary expertise to the table, fueling collective problem-solving and a perpetual quest for improvement. This collaborative ethos not only optimizes resource allocation and trims operational costs but also enhances the individual resilience of businesses in the face of unpredictable challenges. These alliances wield substantial influence by uniting their voices in advocacy for favorable policies and regulations, actively shaping the business environment to serve their collective interests. In essence, Collaborative Alliances represent the evolution of MSMEs, empowering them to thrive, innovate, and navigate the intricacies of today’s dynamic business world with the strength derived from unity.

In Summary:

MSMEs must continue to endure but with an eye for innovation and fast action. The Argentinians best say it. “AGUANTE” –   The power or ability to bear or to last.

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MSME loan portfolio expands 17.8% to Rs 64.1 trillion in FY24: Report

During the financial year 2024, a total of 27.4 million msme loans were sanctioned, amounting to rs 54.2 trillion. this marks a growth of 19.3% in volume and 5.4% in value.

Individual MSMEs recorded a Y-o-Y growth of 12.6 per cent in the value of originations and a 19.4 per cent increase. | Representational

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2023 Annual Performance Report for FP028: MSME Business Loan Program for GHG Emission Reduction

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Some young people plan ‘microretirements,’ borrow against goals of their future selves: Report

'microretirees' borrow form their 'future selves to enjoy some of their retirement while they are still young,' the wall street journal reported.

Is Gen Z off to a good start investing for retirement?

 'Barron's Roundtable' discusses reports that Gen Z members are aggressive about wanting to retire.

Rather than work until they retire permanently decades from now, a growing number of young adults in America are opting for "microretirements," where they take extended breaks from work to relax or travel in the short term.

As the Wall Street Journal reported on Tuesday , some workers in their 20s and 30s are deciding to take extended vacations at their current age, rather than wait until they’ve saved up for retirement later in life. Though proponents say it’s worth it, they might be ending up with $600,000 less at the traditional retirement age. 

The outlet described these individuals as "borrowing years of freedom from their future selves to enjoy some of their retirement while they are still young."

LARGE DEFICITS, HIGH INTEREST RATES MAKING FEDERAL DEBT LESS SUSTAINABLE

Some younger Americans are opting for "microretirements" earlier in their careers rather than saving up entirely for their permanent retirement later in life. (Getty Images / Getty Images)

Though a few workers have committed to the microretirement lifestyle, more and more young people say they are open to the idea of taking extended breaks from work to volunteer or focus on "personal projects," WSJ noted, citing data from Handshake, a job database for college students.

The database reported that "nearly 80% of recent college graduates" like the idea.

The Journal spoke to 31-year-old Dana Saperstein about the microretirement lifestyle. Saperstein quit her marketing job so she could hike the Pacific Crest Trail for six months.

"If I keep working myself to the bone until 60 years old, I might physically never be able to hike the 2,650-mile Mexico-to-Canada trail," she told the outlet. 

Fans of this trend say it’s worth taking the breaks even if less is saved for retirement, or if it takes longer to buy a house or make other major life investments.

Saperstein told the Journal that she and her fiancé saved $60,000 for their major hiking trip. She mentioned that she paused her retirement savings, her fiancé put away $800 a month for the trip, they suspended their car insurance, and they sublet their apartment to cover rent. 

"We would rather prioritize the experiences and spending our money and time that way than buying a home and then being tied to it," she said.

The report provided a snapshot of what microretirees are sacrificing for their more immediate time off. 

"Putting a career on hold usually means losing ground on retirement savings, along with salary and health insurance. Since money put in a 401(k) compounds over time as investments grow, the effects of a career break can be felt decades later," the outlet said.

SOARING DEFICITS TO PUSH PUBLICLY HELD DEBT TO RECORD LEVEL IN 4 YEARS

Microretirements allow younger American workers to take extended breaks off work to travel or work on personal projects. (Hannah Beier/Bloomberg via Getty Images / Getty Images)

The outlet cited Financial Finesse’s Julie Everett, who noted the total retirement funds sacrificed by a 30-year-old making $90k a year and putting 15% into a 401(k) who decided to take several microretirements.

"If they take off a year once a decade and return to the workforce at the same salary they had when they left, their investment balance at age 65 could be about $600,000 less compared with someone who had kept working," he said.

The outlet cited financial experts who advised that people considering career breaks should have their debts paid off . They should also have money saved to cover the time they may need to find a job after their breaks. 

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HONG KONG -- Two listed Chinese state-owned shipbuilders announced Monday that they are preparing for a merger, a move that could end competition between them and help them better serve the military, while dealing with global vessel shortages.

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