Unveiling India MSME Index 2020 by Khatabook

Feb 3, 2021

In 2020, the Khatabook platform recorded 1.038B+ transactions with a cumulative value of more than $100Bn, Representing close to 4% of India’s GDP. This makes the Khatabook platform a strong indicator of the health of the MSME ecosystem in India. India MSME Index 2020 is our small effort to help understand the highly unorganized MSME segment of India through Khatabook platform insights so that the challenges of MSMEs in India can be addressed more effectively.      


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