Small and Medium Enterprises (SMEs) form the cornerstone of India's diverse and rapidly growing economy. These businesses, characterized by their size and turnover, play a crucial role in job creation, innovation, and economic development across the country.

Definition and Classification: As per the Micro, Small and Medium Enterprises Development (MSMED) Act of 2006, which was revised in 2020, SMEs in India are classified based on their annual turnover:

• Micro enterprises: Up to Rs 5 crore
• Small enterprises: Between Rs 5 crore and Rs 75 crore
• Medium enterprises: Between Rs 75 crore and Rs 250 crore

Economic Contribution:

According to the Ministry of Micro, Small and Medium Enterprises, India has approximately 63 million MSMEs. These enterprises contribute significantly to the country's economic output:

• Nearly 30% of India's GDP
• 45% of manufacturing output
• 40% of exports

Employment Generation: SMEs are a major source of employment in India, particularly in semi-urban and rural areas. The sector employs over 110 million people, making it the second-largest employer after agriculture.

In recent years, there has been a significant shift towards digital payments among SMEs in India. This trend has been accelerated by government initiatives like demonetization and the promotion of digital transactions.

Key statistics on digital payments by SMEs:

1. According to a 2023 report by the National Payments Corporation of India (NPCI), UPI transactions involving SMEs have grown by over 200% year-on-year.

2. The Reserve Bank of India reported that in FY 2022-23, digital transactions by SMEs accounted for over 40% of their total transaction volume, up from 25% in the previous fiscal year.

3. A survey by a leading fintech company in 2023 found that 65% of SMEs now prefer digital payment methods over cash transactions.

Challenges and Opportunities:

Despite their significant contributions, SMEs face several challenges:

1. Access to credit: Many SMEs struggle to secure formal financing.
2. Technology adoption: Keeping pace with rapid technological changes can be difficult.
3. Skill development: There's often a gap between available skills and industry requirements.
4. Market access: Many SMEs find it challenging to expand beyond local markets.

Mintoak is focused on addressing the gap in payment services for SMEs, a globally underserved segment. Traditional Point of Sale (POS) systems are expensive and non engaging, and hence banks often struggle to reach and engage with SME merchants effectively. Our innovative solution seamlessly integrates with merchant acquirers' existing payment infrastructure, offering SMEs a consolidated platform for their financial needs.

Mintoak’s primary goal is to provide SMEs with a streamlined platform tailored to their needs. Recognizing the trust banks enjoy and the technological agility they lack, we partner with banks to combine trusted distribution channels with cutting-edge technology. This approach ensures SMEs benefit from a seamless and comprehensive solution. To ensure success, we set strategic goals for banks: increasing gross payment throughput, enhancing customer retention through increased transactions, and leveraging Gross Payment Value (GPV) for cross-selling financial products. By analyzing merchant usage patterns and feedback, we enable banks to implement Merchant Lifecycle Management (MLCM) plan churn models and predictive models to optimize payments. Continuous refinement of our offerings, informed by transaction data, allows us to enhance merchant operations and business value. Our modularized, cloud-native, API-first payments platform empowers banks and merchant acquirers across India, Africa, and the Middle East to rapidly deploy and scale value-added services to millions of SME customers.