According to a report by PayNearby, 68 per cent of micro small and medium enterprises (MSMEs) consume 2GB to 5GB of internet data daily for their business needs.
The report emphasised that 68% of MSMEs acknowledged the growth and beneficial impact of adopting digital technology on both their businesses and personal lives.
As per the report, smartphones emerged as the most popular digital device, preferred by 70 per cent of users. The widespread adoption of smartphones highlights the internet’s crucial role in bridging infrastructure gaps and promoting tech inclusion among MSMEs at the grassroots level. Over 51 per cent of these businesses spend less than Rs 500 per month on internet usage. In addition, the Digital India mission and BharatNet initiative have accelerated internet penetration in rural areas, making it affordable and bridging the digital divide. For internet access at work, approximately 66 per cent used mobile hotspots, followed by Wi-Fi routers at 26 per cent. Meanwhile, ethernet cables and dongles were used by only 5 per cent and 3 per cent, respectively. At home, 75 per cent relied on mobile internet for connectivity.
The report added that the use of digital devices is primarily for work purposes, with 36 per cent spending 4-6 hours on their phones daily. For leisure activities such as social media or online entertainment, the report noted that 66 per cent spend less than 3 hours. Among apps, Youtube is the most preferred for both social media (41 per cent) and entertainment (72 per cent). Interestingly, 58 per cent of respondents stated that they do not have any gaming apps installed on their phones.
Moreover, in its second edition the report was prepared based on a nationwide survey conducted by PayNearby among 10,000+ MSMEs in the retail space (kirana stores, mobile recharge stores, medical stores, customer service points (CSPs), travel agents, among others), recording their awareness of and patterns in tech consumption in their professional and personal lives.
According to the survey, 75 per cent of small business owners aged 18-30 are the most digitally adept, with over 87 per cent in this age group using smartphones for daily business operations and accessing digital content. They are closely followed by the age group of 31-40 years. Notably, 36 per cent of them cited that their monthly income is more than Rs15,000.
The report stated that among all tech-savvy MSMEs, a majority of 29 per cent use accounting software, followed by POS software and customer relationship management (CRM) software at 17 per cent and 14 per cent, respectively, to manage their business operations. Meanwhile, 6 per cent indicated they do not use any software and instead rely on manual methods. When asked about the purpose of using digital devices in business operations, 41 per cent use them to streamline financial transactions and efficiently track business expenses, while 18 per cent state that technology is used to accelerate processes. This highlights the necessity of fostering a thriving tech ecosystem to empower MSMEs and drive their growth for a stronger Bharat.
It also added that in the financial services category, (united payment interface) UPI at 43 per cent and Aadhaar banking at 38 per cent are the two most popular banking services used by MSMEs at the last mile. Additionally, WhatsApp and WhatsApp Business are collectively the most widely used messaging apps, with a usage rate of 97 per cent.
It further added that when asked about the positive impact of technology on their businesses, 31 per cent indicated that it has enhanced business growth by improving operational efficiency, while 27 per cent reported increased sales and income due to technology adoption. As for the main challenges in using technology for business operations, 36 per cent cited resistance to adopting new technology, and 18 per cet struggled with the high costs associated with its implementation. Interestingly, 52 per cent favour English as their preferred language for understanding technology and conducting business transactions, followed by Hindi at 21 per cent.
Commenting on the report, Anand Kumar Bajaj, founder, managing director (MD) and chief executive officer (CEO), PayNearby, said, “The MSME sector is pivotal to our economy, and their adoption of digital technologies is crucial for India’s growth. The MSME Digital Index 2024 showcases significant progress in technology adoption while highlighting persistent challenges. We believe that MSMEs should be supported in their digital transformation journey and ensure that technology’s benefits reach every corner. By leveraging artificial intelligence (AI), augmented reality (AR) and machine learning (ML), MSMEs in rural India can thrive in a digital-first economy. We must foster an inclusive ecosystem that enhances skills and removes barriers, enabling all businesses to embrace digitalisation. Together, we must envision a future of limitless opportunities, driving economic growth and social upliftment in the real Bharat.”
Meanwhile, Jayatri Dasgupta, chief marketing officer, (CMO), PayNearby, said, “This comprehensive report underscores the importance of digital literacy and infrastructure in empowering MSMEs. Our findings show a promising trend of increasing tech adoption, but also point out the areas that require more focus and investment. There is a need to innovate and provide solutions that bridge the digital divide and drive progressive growth.”
Further, Jayatri added, “Focusing on women respondents, who represent 32 per cent of the survey, the data highlights the pivotal role technology plays in fostering women’s empowerment and financial independence. Among the female respondents, 85 per cent own smartphones, enabling their engagement in digital transactions. The growing usage of digital payments, at 40 per cent among women entrepreneurs, underscores their confidence in leveraging technology for business growth. PayNearby’s Digital Naari initiative aims to further empower women by enhancing their digital literacy and providing them with the tools needed to achieve financial independence, ultimately contributing to a more inclusive and prosperous Bharat.”
