Lending Market And Target Segment Assessment

The MSME sector has rightly been denominated as the engine of growth for the Indian economy. Its recent development as a potential business investing ground from home and abroad is a testimony to the above statement. In the same respect, a study was done for a client to understand the MSME segment in India, their financing needs vs supply, their awareness and satisfaction with financing offerings. We also mapped the supply side comprehensively, including the regulatory aspects and competitive scenario to identify supply gaps, resulting in the identification of opportunities which can be exploited by the client.

As a part of the exercise, we reached out to our experts in Fin-tech space and the current players in the market to understand the MSME segment. Then, we identified the total size of the market, categorizing it by services and industries. We then identified the current offerings of the market and the ways in which the MSME fulfils the current lending needs. We also did the competitor landscaping for the client to help them understand the offerings of different players in the segment. Thereafter, we assessed the current needs of these MSMEs by interviewing 250+ MSME owners across metros T1 and T2 cities to understand their behaviour and satisfaction with current offerings in the market.

The sector is seeing an undivided growth both in terms of investing ventures and employment avenues and has taken up the system with a large-scale opportunistic perspective. There are still some aspects that need to be catered by the government and the financial corporations like looking at the gaps from the supply side and the financial incapability that still acts as a deterrence. The study helped in streaming down to many factors responsible for this gap and, also highlighted what could be the possible steps that can be taken to recover the same.

Different player landscaping helped in analysing the different attributes that the other players could be offering and what could be a unique approach that could help the client in building a model that could harness the huge untapped potential in the MSME sector. Also, the study would be fruitful in bringing to notice to the MSME ministry about the improvements that need to be done in the regulatory framework of the body. Wherein the ease of financial aid from different sources could be more hassle-free and private investors could be encouraged more to create an association to build a robust environment for the same. The analysis was more than an eye-opener for the client for the amount of opportunity available in the sector. The only need would be to map the different loopholes and work in a direction profitable for both industry and the business stakeholders.

The findings and insights were used by the client to identify the current gaps in the market and understand the current needs of the target segment. The client was thus able to improvise on the current offerings to suit it better for the target segment.