As the government pushes for digital payments, here’s how active the Ministry of MSMEs is in digital transactions

Credit and financing for MSMEs: As the digital payments ecosystem continues to grow in the country, with businesses and individuals adopting digital instruments such as the Unified Payment Interface (UPI) to conduct transactions, the Ministry of MSMEs, on the other hand, also makes sure to give voice to the government’s digital payments initiative. In fact, the majority of transactions carried out by the Ministry of MSMEs and its attached offices last year were almost entirely digital.

According to the Ministry of MSMEs, all of its offices including Khadi and Village Industries Commission (KVIC), National Small Industries Corporation (NSIC), Office of the Development Commissioner (DC MSME), Coir Board, National Institute for Micro, Small and Medium Enterprises (NI-MSME) and the Mahatma Gandhi Institute for Rural Industrialization (MGIRI) have been digitally enabled.

According to the annual report of the Ministry of MSMEs for the year 2021-22 released last week, 41.36 lakh transactions amounting to Rs 27,292.98 crore were recorded across the six offices of the Ministry of MSMEs in during the nine-month period ending December 2021. 87.32% or 36.11 lakh of these transactions were digital, down slightly from 90.19% during the April-December 2020 period. a year ago. However, in terms of value, 98.53% or Rs 26,891.22 crore of transactions were conducted digitally last year, compared to 92.02% in 2020. Overall, the number of digital transactions last year was also higher compared to transactions of 33.76 lakh in 2020.

Comments from the Ministry of MSMEs for this story were not immediately available.

MGIRI led the count of digital transactions among the six MSME offices with zero offline transactions. All 659 transactions worth Rs 5,552 crore were completed digitally. In contrast, NSIC recorded 94.9% of its transaction volume digitally, followed by 94.4% at NI-MSME, 93.70% at Coir Board, 90.49% at DC-MSME and 87.02% at KVIC. The highest number of 34.12 lakh digital transactions were made at KVIC compared to 89,483 digital transactions at DC MSME; 88,640 at NSIC; 17,805 at Coin Board; and 2,089 at NI-MSME.

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“In accordance with the recommendations of the Committee of Secretaries (CoS) and the directives of the MeitY, a Committee on Digital Payments has been formed within the Ministry under the chairmanship of the Secretary (MSME) to enable the Ministry and its attached offices to successfully complete the implementation of the “Digidhan Mission”, the ministry said in its annual report.

The digital payments market is expected to grow at a compound annual growth rate of 27% over the FY20-25 period. Growth of retail electronic payment systems including National Electronic Funds Transfer (NEFT), mobile banking and development of payment acceptance infrastructure is expected to boost digital payment transactions by Rs 2,153 lakh crore in FY20 to Rs 7,092 lakh crore in FY25, the Indian private Equity and Venture Capital Association (IVCA) and Ernst & Young had stated in its India Trend Book Report 2021.

However, a CLSA report in December last year pegged the value of the digital payments market in India to rise from $300 billion (Rs 22.35 lakh crore) in FY21 to $1 trillion. dollars (Rs 74.52 lakh crore) by FY26. To further encourage digital payments, Finance Minister Nirmala Sitharaman in her budget speech earlier this month had proposed to establish 75 Digital Banking Units (DBUs) in 75 districts across the country by regular commercial banks.