Transforming Small Businesses 2025

Category MSME challenges AI applications Key sectors Financial efficiencySMEs’ costs of capital at 12–14% are higher than those of large Indian corporations’ 8–10%. Ninety-day receivables disrupt cash flows and create liquidity problems, especially as affordable credit is hard to access. Credit-risk assessment Unified cash-flow analytics Integrated financial forecasting Retail Heavy manufacturing Construction Virtual prototypingGenAI offers groundbreaking solutions for virtual prototyping, minimizing dependency on physical mock-ups while ensuring alignment with OEM standards. By enabling real-time design simulations, these tools cut costs, accelerate time-to-market and enhance global competitiveness. Virtual prototyping Real-time design simulations Automotive Heavy engineering Regulatory compliance Adhering to regulatory compliance standards is often a complex task for SMEs, especially in specific industries such as automotive and power equipment. Sustainability reporting is also a challenge, especially given multiple reporting frameworks across different jurisdictions. Automating processes Compliance advisory Sustainability reporting Financial services Pharmaceuticals Food processing Jewellery Credit accessLimited access to affordable and timely credit is a major challenge for SMEs, often caused by factors such as a lack of credit history, inadequate collateral and complex application processes. Credit scoring Automated loan application Dynamic credit-risk assessment Customized financial products Predictive analytics for financial distressAI applications that meet the challenges faced by Indian SMEs (continued) TABLE 3 Source: World Economic Forum 25 Transforming Small Businesses: An AI Playbook for India’s SMEs25