Report on the Financial Impact of COVID on Indian MSME and Their Outlook Amidst the Pandemic
SPJIMR’s Centre for Family Managed Business and Magma Fincorp have partnered a research on the financial impact of Covid on MSMEs in India and their business outlook amidst the pandemic, titled:
‘Report on the financial impact of Covid on Indian Micro, Small and Medium Enterprises and their outlook amidst the pandemic’. Magma Fincorp is an NBFC registered with the RBI as an Asset Finance Company, with its presence in more than 22 states and one Union Territory, with deep presence in rural and semi-rural India. Its customers are essentially firms belonging to the Micro, Small and Medium Sector and are spread across 70 locations. SPJIMR is a premier, internationally accredited management school located in Mumbai.
As part of the industry-academia interface followed by the school, SPJIMR professors Dr. Tulsi Jayakumar and Dr. Anshul Verma worked on analyzing a deep and extensive survey covering more than 14,444 SMEs. Magma designed and administered the survey in the second half of May 2020, over a fortnight, and this involved rigorous phone calls and filling up of questionnaires on the part of the respondents.
Mr. Manish Jaiswal - MD & CEO , Magma Housing Finance & SME Business, stated
The joint report prepared by Magma and SPJIMR is an outcome of deep as well as extensive survey carried out over 98% of Magma Fincorp’s SME customers, numbering 14,444 enterprises, across 70 locations between May 15- May 31, 2020. It uses multi-level data points, with a combination of internal and external data. This is one of the largest sample sizes with precise structured and unstructured data coming from MSMEs and deploys the best of researching capabilities of SPJIMR to present a cogent and crisp response to understanding the financial impact of Covid on MSMEs.
Another key outcome of the report is the revelation of the deep transformation that will be required in the underwriting standards, which will need to deploy a plethora of data trails and data emerging from multiple variables arising out of structured and unstructured transactions which have been ignored hitherto. Conventional underwriting models will undergo a quiet requiem post the Covid pandemic, teaching us a few lessons along the way.
Dr. Tulsi Jayakumar- Professor, Economics and Chairperson, Family Managed Business, SPJIMR stated:
The Centre for Family Managed Business, Bhavans SPJIMR has been a pioneer in supporting and fostering growth of MSMEs in India, which are essentially Family Managed Businesses, through both academic and advisory and consulting inputs. This report is a step in the direction of fostering SMEs amidst this crisis situation, as also building a meaningful and relevant industry-academia interface. The SMEs represent the under-served segments and research and practice in this area is in line with SPJIMR’s mission of ‘Influencing Practice’.
Magma and SPJIMR plan to work together at building knowledge in this under-served area through further collaboration and engagement.