Examine the barriers and success factors in scaling up sustainable MSMEs in India, showcasing case studies and best practices for growth and impact. 

“In the world of business, big things often have small beginnings. MSMEs are the seeds that grow into mighty enterprises.”  

In recent years, MSMEs have witnessed drastic growth in the economic setup of India. They have allowed aspiring entrepreneurs to shape their ideas into reality. Notably, it takes work in a developing country like India to get investments and arrange adequate resources for establishing big corporations. 

In such situations, MSMEs become the beginnings of the development of large corporations in the country. Alongside, they play a significant role in economic growth and contribute massively to the GDP. Figures suggest that MSMEs contribute a massive 33% to the total GDP of India. 

Further, the government plans to increase it to 50%.  On the other hand, environmental and climate change are significant global issues. So the Indian government focuses on sustainable development and wants the MSMEs to further scale in that approach. 

If you want to understand this concept, in this blog, you will learn about the barriers and success factors in scaling up sustainable MSMEs in India. 

Let’s go. 

Success factors in scaling up sustainable MSMEs

There have been various factors that have worked in support of scaling sustainable MSMEs. Some of them are as follows: 

1.    Wide market base

India has a large population that is often viewed as a demerit for the country. On the other hand, it is a boon for businesses that get access to a wide and varied customer base for their products or services. 

This is an essential opportunity for MSMEs who can crave their unique identity by offering eco-friendly products or services. For instance, ‘Leaf Plates India’ is an MSME that sells eco-friendly disposable crockery. It includes plates, bowls, etc., made from leaves that are an alternative to the plastic used in events.

2.    Easy access to finance

One of the significant problems for any MSME is access to finance for beginning and sustaining its operation. But, due to the awareness in India among consumers and investors for sustainability, there has been an increase in finance for sustainable MSMEs. 

For instance, Yes Bank and SIDBI have taken extraordinary measures and initiatives for funding the greening of MSMEs. 

3.    Government support

The Indian government has been excellent support for scaling sustainable MSMEs with favorable schemes and policies. It is committed to promoting sustainable development, meeting its commitments at the Paris meeting. 

For instance, it has launched the National Clean Energy Fund (NCEF) and the India Inclusive Innovation Fund (IIIF). Both of them aim to provide finance to green social enterprises. 

Barriers to Scaling up sustainable MSMEs 

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Apart from opportunities for scaling sustainable MSMEs, various barriers for them are as follows: 

1.    Lack of adequate Infrastructure

Sustainable MSMEs require adequate infrastructure for innovation and production. But, this is not readily available for MSMEs in India. Notably, the infrastructure in rural India needs to be developed for scaling sustainable alternatives. 

For instance, there are regular power cuts, a need for more efficient supply chain systems, and gaps in delivery systems, which is a big problem. 

2.    Shortage of skilled workers

The Indian education programs are not updated with imparting skills related to eco-friendly production. For this reason, there is a lack of skilled workers in scaling up sustainable MSMEs. 

Also, they need to be adequately trained in using renewable energy and waste management, which are other vital areas for sustainability. 

For example, the workforce in India is skilled in traditional waste disposal practices. They need to be adequately aware of recycling and reusing methods. 

3.    Limited access to raw materials

The raw materials required for sustainable alternatives differ from those needed in regular production. It includes adequately sourced materials in an eco-friendly manner. But, these resources are expensive and limited for access to MSMEs. 

Consequently, if MSMEs scale themselves, they will need more raw materials to meet the increasing demand. For this reason, limited raw materials can be a challenge for them. 

For instance, Palm oil, palm kernel oil, and its derivatives are bio-based chemical products. 

Summing Up 

Sustainable MSMEs are in need of time. Particularly in India, the number of MSMEs is rising, and many are working with a cause to create a positive impact on the environment as their business Goal. 

For their further scaling, the broad market base, government support, and easy access to Finance have proved to be a significant boon. However, lacking a skilled workforce, limited raw materials, and proper infrastructure remains a big challenge. 

Consequently, the government needs to work on these eras to promote scaling sustainable MSMEs that shall develop into extensive cooperation. Such corporations would contribute massively to the country’s economic growth and ensure sustainable development in India.


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