MSMEs in Telangana, AP see less impact of Covid 2nd wave

Micro small and medium enterprises (MSMEs) in Telangana and Andhra Pradesh were among the least impacted States due to Covid-19 pandemic in the first half of this year, as per a report by fintech startup Khatabook titled '2021 Mid-year Covid impact analysis on the MSME segment in the country'.

According to the analysis, the MSMEs across the country experienced an average of 11 per cent decline due to lockdowns in 2021. However, the MSMEs witnessed 46 per cent dip during the nationwide lockdown in the previous year. Uttarakhand, Kerala and Madhya Pradesh were the most impacted States. Incidentally, Madhya Pradesh was one of the most impacted States during last year also. The MSMEs in States like AP, Telangana, Bihar, Jharkhand and Punjab have seen only a decrease of 0 – 5 per cent in average credit given by a merchant in a month, while Uttarakhand, Kerala, Madhya Pradesh, Chhattisgarh and Himachal Pradesh experienced a dip of 10 – 20 per cent in the average credit given by a merchant in a month due to the second wave of Covid-19 and lockdowns. These insights are based on the high-level cash flow and business activity analysis of the MSMEs represented by the Khatabook app, assessing the overall impact on businesses during the phased lockdowns across the country by region and category. Unlike the nationwide lockdown during last year, the lockdown remained phased and localised in the Covid second wave. "The MSME ecosystem is more resilient in 2021. Phased lockdowns and preparedness for external circumstances with digital adoption seem to have contributed to business strength. However, with lockdowns and restrictions being a constant reality in the pandemic world, cash flow management will be a defining factor for success of MSMEs," said Ravish Naresh, Co-founder and CEO of Khatabook. "Also, the MSME segment is showcasing a definite learning curve with their usage behaviour of digital platforms, indicating increased proficiency with digital solutions. Lockdowns and restrictions have a direct impact on MSMEs. Their platform indicates the gradual decline in business activities from March and a sudden spike from mid-June when the States started easing the lockdown restrictions."