Micro, small, and medium enterprises play a significant role in the growth of the Indian economy. However, MSMEs often face financial challenges, including inadequate access to credit, delayed payments from customers, and insufficient working capital. Effective working capital management is crucial for the success of MSMEs.

It helps these businesses to improve cash flow, reduce borrowing costs, increase profitability, and improve their creditworthiness. By following best practices such as managing inventory, negotiating payment terms, and speeding up collections, MSMEs can ensure that they have enough working capital to meet their short-term obligations and achieve their long-term goals.

Effective working capital management can have a significant impact on MSMEs, increasing their cash flow, reducing their costs, and increasing their profitability.