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Khatabook reveals India’s MSME Index 2020

Khatabook has unveiled the first edition of its India MSME Index, showcasing the credit and recovery behavior of India’s MSME segment. The MSME segment spread across the country with 110 million employees, and a 30% GDP share is the backbone of the country’s economy. Khatabook platform represents India’s MSME segment, hosting over 9 million monthly active users spanning across 95% of districts of India. In 2020, the Khatabook platform recorded 1.038B+ transactions with a cumulative value of more than $99Bn, Representing close to 4% of India’s GDP. This makes the Khatabook platform a strong indicator of the MSME ecosystem in India.      

In the first edition, the India MSME Index by Khatabook highlights the credit and recovery behaviour of the MSME ecosystem and other nuances like variations in categories and regions. The index also looks into the pandemic-induced lockdown impact, with 2020 being a diametrically different and challenging year for small businesses across the country. As recognized in the provisions of the MSME Development Act, 2006, the issue of delayed payment to small businesses often severely hinders their growth. This makes it imperative to assess MSME’s credit and recovery behaviour to understand the overall health of this segment.

Ravish Naresh, Co-founder and CEO – Khatabook, said  “MSMEs are the backbone of our economy, and it is humbling for Khatabook to be an integral part of this ecosystem. Khatabook app has received acceptance across the country, including urban, semi-urban, and rural areas. The Khatabook app is focused on improving the business and financial efficiency of the merchants through various digital features. This index is our small effort to help understand this highly unorganized segment through Khatabook platform insights so that the challenges of MSMEs in India can be addressed more effectively.”

Highlights of the India MSME Index 2020 by Khatabook are as follows:

  • The average outstanding consumer credit amount by merchant per month was highest in December
  • The recovery for the outstanding consumer credit was highest in May and lowest in December
  • The average number of days to recover the consumer credit varied from 44 to 10 in the MSME ecosystem in India in 2020
  • While MSMEs in India run on credit, the credit behavior varies by region and category. Business on credit for MSMEs in Southern states is higher with approx. 45% above the national average. On the other end of the spectrum were eastern states with the lower levels of business on credit.
  • Categories with fastest recovery time
    • Travel/ Tours
    • Hotels/Hostels
    • Food
    • Construction
  • Categories with slowest recovery time
    • Jewellery
    • Health
    • Textile/Apparel/Footwear
    • Electrical
    • Finance Products/Services
  • Categories with highest outstanding consumer credit amounts at any given point of time
    • Construction
    • Finance Products/Services
    • Jewellery, accessories
    • Home Decor/Furnishing
  • Maharashtra recorded the highest purchase of jewellery in 2020. Despite the high price of gold, the average ticket size of Jewellery purchases increased by 30% in November from October due to the festive season.
  • Gujarat recorded the highest purchase of textiles in 2020. The category growth for textile in Gujarat was 9% in 2020
  • Lockdown Observations:
    • The average recovery amount was higher  for all the regions during lockdown as there were more efforts by merchants to recover the money to support them in business downtime
    • Time to recover the consumer credit during lockdown increased as people preferred delaying payments to manage cash flow during the lockdown
    • Construction, Home Decor, Furnishing, Education, Hotels/ Hostels, Travel/Tours were the most impacted categories during the lockdown. Simultaneously, Mobile/Communication,  Health, groceries/Kirana, and Computers/accessories and Electrical were the least impacted categories during the lockdown.
    • Food, Telecom, Mobile/Communication, and Stationary experienced the fastest recovery post lockdown.


Business on credit behavior by state increases the average recovery amount for the particular state.

  • Top 5 states with highest consumer credit recovery (fewer bad debts)
  1. West Bengal
  2. Himachal Pradesh
  3. Chandigarh
  4. Punjab
  5. Haryana
  • Top 10 cities with highest consumer credit recovery (fewer bad debts)
  1. Machhagan
  2. Siliguri
  3. Kolkata
  4. Chandigarh
  5. Panipat
  6. Mohali
  7. Karnal
  8. Shimla
  9. Ranchi
  10. Raipur
  • Top 5 states with the fastest recovery of consumer credits (less time to recover)
  1. Kerala
  2. Tamil Nadu
  3. Manipur
  4. West Bengal
  5. Assam
  • Top 10 cities with the fastest recovery of consumer credits (less time to recover)
  1. Thrissur
  2. Kochi
  3. Ernakulam
  4. Salem
  5. Coimbatore
  6. Bhubaneswar
  7. Chennai
  8. Kolkata
  9. Imphal
  10. Vijayawada

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