Micro, Small, and Medium Enterprises (MSMEs) are the lifeblood of an emerging economy such as India, which does not only provide a GDP contribution of 30% but also creates jobs for millions of people in both urban and rural areas. However, their role is crucial.
On the upside, new developments in Digital Public Infrastructure (DPI) that are open and interoperable such as Aadhaar, UPI, GSTN, Account Aggregator, and ONDC are revolutionizing the MSME sector
Table of Contents
Formalisation: The First Step to Inclusion
For years, the majority of MSMEs have been conducting their business informally, which means they did not register, kept no digital records, and there were no formal contracts
Examples of these platforms are:
- Udyam Registration
- Aadhaar-based e-KYC
- Digital GST networks
have simplified the formalisation work process to a huge extent. Present time, MSMEs can do online registrations, verify identities electronically, and also create a financial footprint. This digital presence becomes the key that unlocks further services like subsidies, skilling, and — most importantly — credit.
Financing Through Digital Data
Loan provision to MSMEs is not always an easy task as traditional banks often are afraid due to a lack of a credit history or no collateral. However, this problem is solved with the help of DPI technology.
The Account Aggregator framework, along with GST and UPI data, provides lenders with access to financial data that is verified, consent-based.
It enables:
- Cash-flow-based
- Instant
- Faster
New schemes like PM SVANidhi are harnessing the power of these tech tools to fulfill the credit needs of lower-income and marginal communities such as street vendors. That too, most of the time, within a matter of days and without the hassle of carrying any physical documents.
Beyond Finance: Market Access via ONDC
Finance alone cannot do everything. MSMEs, apart from finance, also require access to customers and markets that are competitive. The Open Network for Digital Commerce (ONDC) is a nifty idea that assists small businesses and retailers in their e-commerce journey without being tied to monopolistic platforms.
When ONDC is utilized to unbundle the different layers of digital commerce (logistics, payments, and listings), it thus becomes:
- Local shops to go digital.
- Artisans and rural sellers to reach national markets.
- Fair competition for all players.
Besides, TReDS (a platform for invoice discounting) and GeM (a platform for selling to the government) are two examples of complementary platforms that empower MSMEs to grow their revenue base and improve cash flow.
A Global Blueprint in the Making
The world is now watching India’s DPI-driven approach to MSME empowerment. It is a model that can be replicated to show how public digital rails can reduce inequality, enable entrepreneurship, and foster inclusive growth.
But still, there are hurdles ahead — digital literacy, cyber awareness, and support infrastructure are essential factors in ensuring that these benefits can reach the last mile.
Conclusion
Digital Public Infrastructure is no longer just a mere tool, it has become an intensive transformational force. It is bridging the gap between MSMEs by facilitating formalization, credit access, and digital market participation.
As India pushes forward with building and innovating on this basis, its small businesses are at last powering into the digital future — more empowered, more intelligent, and more self-sufficient