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/approach

This 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.

Findings

The 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/implications

The 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/value

The 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.

Citation

Singh, S., Chamola, P., Kumar, V., Verma, P. and Makkar, N. (2023), "Explaining the revival strategies of Indian MSMEs to mitigate the effects of COVID-19 outbreak", Benchmarking: An International Journal, Vol. 30 No. 1, pp. 121-148. https://doi.org/10.1108/BIJ-08-2021-0497