To design an ERM strategy for MSMEs, we have to start with increasing its awareness. (Photo source: IE) - By Hersh Shah and Sandeep Bhatnagar
Ease of Doing Business for MSMEs: After agriculture, the Indian Micro, Small, and Medium Enterprises, or MSME, sector is the second-largest employment generator in the country. It is viewed as the backbone of the Indian economy, driving its socio-economic development. According to government figures in 2019, it employed more than 110 million people and accounted for 31.8 per cent share in national Gross Value Added (GVA) and almost half of total national exports. However, due to resource limitations, these enterprises are typically very fragile, with high-risk liability, which makes them vulnerable even to the smallest tremors of instability in the business ecosystem. The only way to counter these threats is to develop a risk-resilient organisation, by leveraging Enterprise Risk Management, or ERM, to safeguard against economic instability, natural disasters, and cyber risks.
ERM should be a mandatory process for MSMEs, in order to improve their chances of sustained and successful longevity. However, it is often perceived simply as an added…
