How Fintechs Are Empowering MSME’s with Increased Access to Credit ?
Contents News/Article Date: 22nd September 2023
Relating to which Act: Micro, Small and Medium Enterprises Development Act, 2006
Applicable to which State: All the Members of SME in various States/UTs
Type: SMB Story News Report
Pertains to: SMEs registered under the MSME Act.
Relevance of this news: Karma Global is a notable member of MSME for over a decade. Karma Global does a lot of compliance and legal work for a number of small and medium MSME Enterprises in relation to payroll, staffing, labour laws, HR services, training and so no.
Karma Global also offers Shops and Factory Compliance Services such as:
- Renewal/ Exemption Certificates. …
- Maintenance of Statutory Record. …
- Compliances on Health, Safety and Welfare Measures. …
- Approval for Factory Building Plan. …
- Determination of Wages and Working Hours. …
- Vendor Audit and Surveys. …
- Factory Inspections. …
- Statutory Disclosures, Notices & Notifications.
And in the current instance: In India, they account for approximately 33% of the GDP and generate over 120 million jobs across various industries. However, this potential growth story faces headwinds in the form of the credit gap that, hinders its growth potential.
As of September 30, 2022, the Reserve Bank of India (RBI) reported the credit outstanding to the MSME sector amounted to Rs 20.7 lakh crore.
According to the findings of the Expert Committee on MSMEs, led by UK Sinha, the credit gap in the MSME sector was estimated to be around Rs 20-25 lakh crore in 2019.
More than 80% of MSMEs are estimated not to have access to formal financing systems.
A paper by Avendus Capital on MSME lending revealed a credit gap of $530 billion in the MSME sector. It suggested only 14% of the 64 million MSMEs in India have access to credit.
A report pointed out the credit gap presents a significant opportunity for lenders, with $120 billion belonging to the small-ticket loan segment with a ticket size of less than $1 million.
MSMEs and Home-grown Businesses Added Colour and Flair to The G20 Summit Explaining the credit gap:
Subject: How Fintechs Are Empowering MSME’s with Increased Access to Credit?
Appended is the complete news item
How Fintechs Are Empowering MSME’s with Increased Access to Credit?
By providing faster, more accessible, and tailored credit solutions, fintechs can empower MSMEs to drive economic development, create jobs, and foster innovation.
MSMEs are often touted as the backbone of the Indian economy, contributing significantly to all avenues of capital generation, including employment, manufacturing and exports.