India’s MSME (Micro, Small, and Medium Enterprise) sector plays a pivotal role in economic growth. It contributes to approximately 30 percent of the national GDP and is a requisite generator of employment, with roughly 6.33 crore Micro, Small and Medium Enterprises hiring more than 11 crore people. Moreover, this sector also occupies more than 40 percent of the country’s cumulative exports. 

MSME’s contribution to the GDP is likely to rise to almost $1 trillion by the year 2026. However, despite its vital economic contributions, MSME is one of the many business sectors hit hard by the COVID-19 pandemic early this year. 

As supply chains that sustained MSME functions got disrupted, it brought to the spotlight some of the systemic hurdles faced by Micro, Small, and Medium Enterprises that just intensified in the post-COVID-19 era.

This is why many small business owners struggle with their daily operations and find it hard to repay their existing loans for MSME. 

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What are the challenges faced by MSMEs after Covid-19?

Lack of working capital

Numerous MSMEs usually need constant sources of working capital to remain afloat. The business loan amount they need is pretty small, varying from Rs 50,000 to Rs 1 lakh.

However, the conventional banking method can satisfy only a part of the loan request from the sector. Also, as per recent research, India’s conventional banking policy can only provide about Rs 11 lakh crore of the loan that MSMEs demand, which is less than one-third of the requirement from the sector. 

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A significant reason for this extensive gap in demand and supply is how MSMEs work. Given their small size, they are inadequate to be a member of the GST network, and, as a consequence, they are not obliged to keep a set of commercial records. 

Due to this lack of formal documentation, banks do not carry out standard underwriting methods to evaluate an MSMEs creditworthiness. However, nowadays various secured lenders have come into existence who provide instant business loans to MSME to overcome this problem of working capital deficiency. 

Managing the business environment

During the Covid-19 phase, it was challenging as nearly every Micro, Small and Medium enterprise remained shut as their factory floors held no room for social distancing.

Also, due to extensive out-migration from cities, many workers left the job, and they now find it challenging to remobilize. 

Lack of access to marketplaces

Entry to marketplaces is essential for the growth of any business. Most MSMEs operating in Indian in the pre-COVID-19 era carried out their business solely through a brick and mortar model (physical trading of goods and services).

However, with the advent of the global pandemic, the business chain of the MSMEs broke, and they lacked access to marketplaces due to geographic restrictions. 

Disrupted supply chains and policy uncertainty

Business policies are growing fast. MSME administrators usually work alone and cannot form emergency teams to trace modifications. Hence when various business policies changed after the pandemic, many business owners were entirely heedless about it.

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Also, due to the disruption of transport services, the entire supply chain of the MSMEs got imbalanced. 

How is Ziploan helping MSMEs rise after the pandemic crisis?

Due to the advent of the global pandemic, the MSME sector finds itself struggling with long-standing hurdles of unavailability of working capital, complicated administrative and licensing mechanisms, acrimonious loan disbursal policies, various compliances specifications, nascent digital adoption, and an intricate taxation policy. 

These are some reasons why many MSMEs were unable to receive a business loan. Also, the non-existing credit history, amount of paperwork, lack of documentation, and non-availability of adequate collateral made it more difficult to obtain a loan for MSMEs.

Furthermore, the difficulties of administering a business amidst pandemic and fall in demand add additional complications to the stressed sector. 

Hence to help MSMEs rise again after the Covid-19 crisis, Ziploan is providing business loan facilities to the MSME business owners. Ziploan is a leading NBFC (Non-Banking Financial Company) in India, registered with RBI that offers business loans to MSMEs for up to INR 7.5 lakhs. 

Ziploan always strives to present a seamless experience for its customers. Apart from this, to help MSMEs rise again after the Covid-19 crisis, Ziploan also renders working capital loans and machinery loans to medium and small business owners. 

The main aim of this financial institution is to help businesses who are unable to carry out even their daily activities due to a lack of funds. Mentioned below are some advantages of availing of an MSME loan from Ziploan: 

  • Online Loan Application: There is no need for the applicant to visit the physical institution to obtain a business loan at Ziploan. Business owners can quickly apply for an MSME loan online by visiting the Ziploan website or mobile application and get instant approval within minutes.  
  • Minimum Documentation: While seeking a business loan from Ziploan, the documents required for receiving credit are minimal. Also, the applicants can easily apply for a loan on the website by uploading relevant documents.
  • Easy Eligibility:  The loan eligibility criteria at Ziploan is pretty easy to accomplish. All you require is to own a business with an annual turnover of INR 10 lakh and above and financial statements of the preceding two years. 
  • Flexible Loan Repayment: Ziploan allows you a flexible loan repayment duration option. This implies that small and medium business owners can repay their loan amount without considering it a burden, as per their business revenue. In addition to this, the business owners can additionally choose a loan repayment tenure of 12/18/ 24/36 months. This flexibility is what makes Ziploan a leading financial lender amongst MSME business owners. 
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So what are you waiting for? Get in touch with Ziploan now and make your MSME business flourish and earn maximum profits from your seamless business operations. To know more about our lending options, you can visit our website.

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