There are an estimated 49 million MSMEs in the country, providing employment to 111 million people which is next only to the agricultural sector. The sector accounts for 45 per cent of the manufacturing output and contributes close to 40 per cent of all exports from the country.
Further, about 55 per cent of the MSMEs are located in rural areas, thus offering a great potential for rural development and inclusive growth. 21. Despite a large contribution of the MSME sector to the GDP, the sector often complains about lack of financing from institutional sources.