MSME Day: Everything about Micro, Small, and Medium Enterprises Day

As we approach Micro, Small, and Medium Enterprises Day, it's essential to recognise how these incentives help small businesses thrive in challenging economic environments. The MSME Day celebration highlights the importance of these enterprises to sustainable development and the global economy.

It also serves as a reminder for entrepreneurs to formalise their businesses and tap into the wide range of government support available through MSME registration.

What is MSME Day?

Micro, Small, and Medium-sized Enterprises Day is an international observance designated by the United Nations and celebrated annually on 27th June. The MSME Day acknowledges the tremendous contribution of MSMEs to the global economy.

What is MSME Day, if not a recognition that these enterprises, which form the backbone of most economies worldwide, deserve special attention?

The day aims to raise awareness about their role in poverty eradication, employment creation, and sustainable development. It also serves as a platform to discuss challenges faced by MSMEs and explore ways to support their growth and resilience.

The history of MSME Day

The journey of MSME Day as an official observance has significant historical milestones:

• In April 2017, the United Nations General Assembly formally recognised the crucial role of MSMEs in achieving the Sustainable Development Goals (SDGs) and declared 27th June as Micro, Small, and Medium Enterprises Day.
• The resolution was proposed by the International Council for Small Business (ICSB) and gained support from 54 member states.
• The inaugural Micro, Small, and Medium-sized Enterprises Day was celebrated globally on 27th June 2017, marking the beginning of an annual tradition.
• The UN's decision acknowledged that MSMEs account for approximately 90% of businesses worldwide and contribute significantly to employment and GDP.
• Each year since its inception, the day has featured a specific theme addressing contemporary challenges and opportunities for small businesses.
• The observance gained additional significance during the COVID-19 pandemic, which severely impacted small businesses worldwide.
• The day has evolved to become a platform for policy discussions, knowledge sharing, and highlighting success stories of MSMEs across different regions.

Significance of MSME Day

The MSME Day carries profound importance for several reasons:

• Economic impact: MSMEs constitute about 90% of businesses globally, generate 60-70% of employment, and contribute approximately 50% to the world's GDP.
• Poverty reduction: Small businesses provide livelihood opportunities for vulnerable populations, helping reduce income inequality and poverty.
• Innovation drivers: MSMEs often demonstrate remarkable agility and innovation, introducing new products and services that address local needs.
• Women and youth empowerment: These enterprises frequently offer entrepreneurial opportunities for women and young people, promoting inclusive economic growth.
• Local development: MSMEs typically source locally, reinvest in their communities, and contribute to balanced regional development.
• Supply chain integration: They form vital links in domestic and global value chains, supporting larger enterprises and economic ecosystems.
• Sustainability champions: Many small businesses pioneer sustainable practices and environmentally friendly solutions.
• Crisis resilience: Despite being vulnerable to economic shocks, MSMEs have demonstrated remarkable adaptability during crises like the COVID-19 pandemic.
• SDG advancement: Their activities directly contribute to multiple Sustainable Development Goals, particularly SDG 8 (decent work and economic growth).

MSME Day celebration in India

India celebrates MSME Day with particular enthusiasm, given the sector's enormous contribution to the national economy. The MSME sector in India contributes nearly 29% to the country's GDP and accounts for almost half of its exports.

The day typically features national and state-level events organised by the Ministry of Micro, Small and Medium Enterprises, industry associations, and financial institutions.

The celebrations include recognition of outstanding MSMEs through awards, exhibitions showcasing MSME products and innovations, seminars on policy reforms, and workshops on accessing finance and adopting new technologies.

Digital platforms have become increasingly important in India's MSME Day celebrations, with virtual events allowing broader participation. The day also serves as an occasion for announcing new government initiatives and schemes for the sector.

In recent years, there has been a growing focus on promoting digital transformation, sustainability, and global market access for Indian MSMEs, reflecting the evolving priorities for small business development in the country.

Financial institutions, including Axis Bank, offer specialised Term Loans and financial solutions tailored for MSMEs to help them expand operations, upgrade technology, or manage working capital requirements.

MSME Day celebration around the world

What is MSME Day celebration like globally? It varies significantly across regions:

• United Nations: Hosts high-level events featuring policy discussions, research presentations, and success stories from around the world.
• European Union: Organises the SME Assembly and European Enterprise Promotion Awards, coinciding with MSME Day.
• Latin America: Countries typically emphasise cooperatives and community-based enterprises during their celebrations.
• North America: Celebrations highlight the role of start-ups, venture capital, and entrepreneurial ecosystems.

Key achievements & contributions of MSMEs

Micro, Small and Medium Enterprises (MSMEs) have made significant contributions to economies across the world. As we celebrate MSME Day, it's important to highlight their role in shaping inclusive and sustainable development.

• Employment generation: MSMEs are known for their high employment potential. For every unit of capital invested, they generate up to twice as many jobs compared to large enterprises. They play a critical role in providing livelihoods, especially in labour-intensive industries such as textiles, handicrafts, and food processing.
• Economic resilience: By operating across multiple sectors and regions, MSMEs help reduce dependency on a few industries or corporations. Their distribution across urban and rural areas promotes balanced economic growth, making economies more adaptable during downturns.
• Innovation leadership: Small businesses often pioneer creative solutions, new products, or niche services. Without large bureaucracies, they can quickly respond to market changes and innovate based on customer needs.
• Export participation: MSMEs contribute between 20% to 40% of exports in many developing countries. They help introduce local and handmade goods to international markets, promoting cultural exports and economic diversity.
• Rural development: Many MSMEs are set up in rural or semi-urban areas, bringing economic activity to regions often overlooked by big corporations. This supports local communities and curbs urban migration.
• Skill development: They serve as informal training grounds, helping workers build entrepreneurial and technical skills.
• Social impact, cultural preservation & tax contribution: MSMEs address social needs, preserve traditional crafts, and contribute to government revenues, all while creating a meaningful impact at the grassroots.

Challenges faced by MSMEs

Despite their critical role in economic development, MSMEs face a variety of challenges that hinder their ability to scale and compete effectively. These limitations are especially visible in developing economies and were sharply highlighted during the COVID-19 pandemic, when 60–80% of MSMEs faced severe disruptions.

• Financial constraints: Access to affordable finance remains one of the biggest roadblocks. The global MSME credit gap stands at $5.2 trillion annually. Many small businesses struggle to meet collateral or documentation requirements, which prevents them from securing loans or working capital.
• Regulatory burdens: While compliance frameworks aim to create standardised business environments, smaller firms often find them overwhelming. Labour laws, tax filings, environmental regulations, and business registrations consume time and resources that MSMEs cannot always spare.
• Information asymmetry: MSMEs often lack access to critical business information, such as evolving market trends, customer insights, and government schemes. This limits their ability to innovate or expand.
• Infrastructure gaps: Poor logistics, inconsistent power supply, and unreliable internet can increase operational costs, especially in rural areas.
• Skill shortages & technology gaps: Many MSMEs struggle to hire or retain skilled staff. Limited exposure to new technologies also prevents them from automating operations or improving productivity.
• Market barriers & climate risks: Trade certifications, procurement policies, and environmental challenges also present significant hurdles.

Addressing these constraints—particularly during initiatives tied to MSME Day—can unlock the sector’s full potential and create a more resilient economy.

Initiatives to support MSMEs

Recognising the value of MSMEs to economic development, several targeted initiatives have been rolled out globally to support their growth. These programmes aim to improve access to finance, simplify regulations, and strengthen long-term competitiveness, especially crucial on occasions like MSME Day.

• Credit guarantee schemes: To encourage lending to MSMEs, governments often provide partial credit guarantees to financial institutions. For example, India's CGTMSE helps reduce banks’ perceived risk and allows more small businesses to access funding without collateral.
• Simplified regulatory frameworks: Digital platforms now offer paperless MSME registration, single-window approvals, and simplified tax compliance. These measures ease the entry and operations of small firms.
• Digital transformation support: Schemes encourage MSMEs to adopt e-commerce, digital payments, and inventory software. Programmes like “Digital MSME” in India help bring traditional businesses online, increasing efficiency and market reach.
• Skill development: Government and private initiatives offer training in entrepreneurship, digital tools, and financial literacy. These build business acumen and workforce capabilities.
• Market linkages: Digital marketplaces and procurement platforms like the Government e-Marketplace (GEM) connect MSMEs directly with buyers, improving revenue streams and reducing dependency on intermediaries.
• Cluster development: Sector-based industrial zones with shared infrastructure improve logistics, branding, and bargaining power for MSMEs.
• Incubation & acceleration: Start-up hubs and incubators offer mentorship, networking, and funding support to early-stage MSMEs and entrepreneurs.
• Green finance & crisis response: Environment-focused loans and schemes like India’s Emergency Credit Line Guarantee Scheme provide targeted help during climate or financial crises.

These efforts build an ecosystem where MSMEs can thrive, innovate, and contribute sustainably to the economy.

Organisations that support MSMEs

Multiple organisations at the global and national levels work to uplift MSMEs through policy advocacy, financing, and capacity-building. These entities provide crucial support across areas like funding, training, digitalisation, and international trade, especially relevant during MSME Day observances.

• International Finance Corporation (IFC): A part of the World Bank Group, IFC offers financial products and advisory services tailored to small businesses in developing countries. It focuses on market-based solutions for inclusive growth.
• United Nations Industrial Development Organization (UNIDO): UNIDO implements programmes for industrial development and supports MSMEs in adopting sustainable practices and new technologies through public-private partnerships.
• Small Industries Development Bank of India (SIDBI): SIDBI plays a pivotal role in financing, mentoring, and supporting MSMEs in India. It offers refinancing schemes, innovation funds, and digital adoption programmes.
• European Bank for Reconstruction and Development (EBRD): Operating across Europe and Asia, EBRD provides financing and training, often targeting women-led MSMEs and green transition projects.
• Asian Development Bank (ADB): ADB partners with financial institutions to improve MSME lending and value chain integration across the Asia-Pacific regions. It also supports technology upgrades and business linkages.
• African Development Bank (AfDB): AfDB runs development programmes focused on youth entrepreneurship, access to finance, and sustainable business models in Africa.
• International Trade Centre (ITC): ITC helps MSMEs become globally competitive through branding, product development, and trade facilitation services.
• Chambers of Commerce & MFIs: Local chambers advocate policy reform and offer networking platforms, while microfinance institutions extend credit to underserved microenterprises.

Together, these organisations strengthen MSME ecosystems, ensuring businesses not only survive but thrive.

How Neo for Business empowers MSMEs?

For growing businesses seeking smarter banking solutions, Neo for Business by Axis Bank offers an efficient digital banking platform made specifically for MSMEs. With an easy-to-use interface, reduced paperwork, and integrated credit offerings, NFB helps MSMEs manage their finances and scale confidently in a digitally evolving economy. Explore Neo for Business to unlock tailored financial tools like single and bulk payment with easy tracking, bulk beneficiary addition, GST invoice with reminders, recurring collection to maintain the cashflow and much more that power your business journey.

Conclusion

Micro, small, and medium enterprises day or MSME Day, serves as a powerful reminder of the indispensable role these businesses play in creating inclusive, resilient economies worldwide. As we celebrate MSME Day, we acknowledge both their tremendous contributions and the significant challenges they continue to face.

Supporting MSMEs isn't just about economic policy—it's about fostering innovation, creating meaningful employment, and building sustainable communities. The future of the global economy depends significantly on how effectively we can empower these vital enterprises to reach their full potential.

Also Read: What is an MSME Loan & how does it work?

FAQs