The Micro, Small and Medium Enterprises(MSME’s) sector is the second-largest base globally after China and currently, it is the sector that generates the most employment after agriculture. Through this sector, more than 6000 products are manufactured, ranging from traditional to high-tech products.
MSMEs have a significant contribution to employment, GDP, and equitable regional development. Despite this, there are several challenges faced by MSMEs .

Challenges faced by MSMEs:
1. Lack of finance: This is a major issue as around 16% of MSMEs do not get timely financial availability.
2. Difficulty in obtaining loans: Due to a lack of collateral and the complex procedures of banks, it becomes more complicated to get loans.
3. Regulatory issues: Changes in tax compliance and labor laws hinder growth and innovation.
4. Lack of infrastructure: Limited production capacity, increased competition due to globalization, and the rising trend of e-commerce leave MSMEs lagging behind in competition.
5. Lack of skilled workers or experts: This limits competitive advantage.
6. High corruption, apathetic bureaucracy, lack of standardized policies, and inability to benefit from schemes,these become significant problems.
7. Impact of COVID-19: The pandemic has exacerbated challenges. In recent years, the credit rating agency ‘Moody’s’ has made it clear that due to COVID-19, the recovery of MSMEs is difficult, and for many MSMEs, it would be their final year.

In such a scenario, comprehensive policy measures are needed to promote a stable and prosperous MSME sector, which would enhance financial access, simplify regulatory frameworks, and invest in infrastructure and skill development.