Only 5% MSMEs have fully embraced digital technology, says Yes Bank survey

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Digital adoption among micro, small and medium enterprises (MSME) is still a long way to go as only 5% out of the 2,700 MSMEs, surveyed by the private sector lender Yes Bank, have fully embraced digital adoption. The full-scale technology adoption, according to the survey, includes the use of cloud services, ERP, CRM, account management software, digital banking etc.

Lack of understanding in choosing the right technology solution and low impact on overall profitability are among the key challenges in adoption of technologies followed by lack of skilled manpower to operate technology, lack of trust in technology, and the high cost of equipments.

While 63% of the MSME surveyed said that they are going digital, only 50% perceive profitability and operational efficiency as benefits of going digital and over 80% of all digitized MSMEs indicated overall positive digital experiences, the survey said.

“The macro business environment that MSMEs are operating under is undergoing a transition. Digitisation is becoming increasingly vital for long term survival and future growth,” said Sumit Gupta, senior group president – mid-segment, multinational corporate banking, government banking, agribusiness & knowledgeYes Bank.

MSMEs in sectors including IT & ITeS, food processing, engineering, manufacturing, healthcare and pharmaceuticals have high levels of digital adoption, the survey found.

Getting a competitive advantage and increase in productivity are among the key reasons for the adoption among 60% of businesses using advanced technologies.

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