Explaining the revival strategies of Indian MSMEs to mitigate the effects of COVID-19 outbreak

Abstract

Purpose Micro, small and medium enterprise (MSME) is the kingpin of Indian economy. It contributes to 48% of India's exports and provides employment to 110 million people. As a result, it is critical to evaluate the obstacles, expose them and find a way to overcome the crisis due to the pandemic. The study aims to analyse the impact of financial and non-financial measures for the revival of MSME and its impact on firm sustainability and future opportunity as perceived by MSME owners/heads during the COVID-19 outbreak.Design/methodology/approachThis study, based on a cross-sectional survey of 197 export-oriented Indian MSMEs, attempts to investigate covid crisis mitigation strategies/measures in the context of the COVID-19 crisis. The confirmatory factor analysis (CFA) model was applied to check model fit, and structural equation modelling (SEM) was employed for data analysis.FindingsThe results of this study show the financial and non-financial revival measures such as firm revival, marketing training, customer relationship management (CRM), financial incentive and firm support, extending worker social security and financial access and price control positively impact MSMEs' business sustainability and future opportunity as perceived by the respondents that lent good support to the hypothesis.Research limitations/implicationsThe study emphasizes management in association with government and financial institutions to design short-term as well as long-term strategies that may enhance their sustainability in the market. MSMEs are being forced to reassess their business strategy and modify their operating model as a result of the uncertain/unpredictable climate. Many levels of strategy aid in revitalizing the company and providing future possibilities to move forward if the government schemes positively impact the perception of entrepreneurs. Further, the study identifies the immediate measures to tide over the crisis over this sector and then furnishes recommendations for closing the identified gaps in the present understanding.Originality/valueThe impact of COVID-19 on Indian MSMEs and how these MSMEs are dealing with it are highlighted in this paper, which is quite scarce and insufficient to cover the gap. It also provides a comprehensive view of firm sustainability and perceived opportunity among MSMEs.

The Business Survival of Micro-enterprises in Facing Economic Uncertainty

“…Entrepreneurs' adoption of digital technology has accelerated, particularly during the pandemic. For micro-enterprises to cultivate, digital literacy is required, skills must be improved, e-commerce must be widely accepted within the sector, and marketing strategies must be modified (Effendy, 2018;Singh et al 2022). During the COVID-19 pandemic, digital marketing positively affected firm performance in terms of increased sales, improved customer relationships, and increased productivity and creativity (Syaifullah et al, 2021).…”

A citizen-centric approach to understand the effectiveness of e-government web portals: Empirical evidence from India

“…In this investigation, first, primary data were collected from Indian citizens using an online survey question developed collected from May 2021 to July 2021. Citizens were requested to engage in the research process via email, and the questionnaire was posted on several social media sites such as LinkedIn, Research Gate, and Facebook, with potential respondents being directed to the website to complete the survey (Paliwal et al, 2022;Singh et al, 2022). There were three sections to the survey questionnaire.…”

Ensuring resilience through fiscal responses to COVID-19; an empirical study of Mauritian micro small medium enterprises (MSMEs)

“…SMEs found in developing countries have also fallen prey of the negative effects of COVID-19. For instance, MSMEs are considered to be kingpin of the Indian economy contributing to 48% of India's export and employing around 110 million people (Singh et al, 2022). In this context, Dun & Bradstreet (2021) conducted a survey to assess the impact COVID-19 on small businesses in India and the results revealed that 82% of the respondents were negatively impacted by the pandemic with a fall in turnover and lack of inputs, lesser access to credit facilities and a massive reduction in demand for their products.…”

“…SMEs found in developing countries have also fallen prey of the negative effects of COVID-19. For instance, MSMEs are considered to be kingpin of the Indian economy contributing to 48% of India's export and employing around 110 million people (Singh et al. , 2022).…”