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Last updated: 21 Aug, 2018  

Rupee.9.Thmb.jpg Bank, FinTech tie-ups a boon for MSMEs

Fintech.9.jpg
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Bikky Khosla | 21 Aug, 2018

Over the last few years, India has witnessed a FinTech revolution. 'Funding for financial technology' or 'FinTech' in short is basically about using technology to improve financial services, and with its ability to touch nearly every aspect of the financial value chain, the scope of this model is enormous. Experts view that these companies can play a significantly positive role in increasing the flow of finances to the micro, small and medium enterprise (MSME) sector. There is not an iota of doubt about it.

A recent survey reiterates this view. The FICCI-IBA survey, carried out for the period January to June 2018, has found majority of respondents showering praise on this emerging model. According to them, FinTech companies, with their innovative technologies and business models, enjoy a competitive edge due to their cost-effective operations and fewer regulations than the traditional finance sector. While banks are known for their cautious approach and tougher lending norms, these companies, they view, can make a big difference in lending to MSMEs.

If banks and FinTech players come together, the result can naturally be even better. Banks, instead of fighting these companies, can gain from them in terms of last mile reach, more customers, better technology and less operational costs. Positively, some banks -- from both private and public sectors-- have already joined hands with some FinTech companies to reap such benefits. This trend needs to be encouraged further as it can, besides empowering both banks and FinTech companies, make a big difference in helping our cash-starved small businesses.

Recently, the Government has formed a Steering Committee to study issues relating to development of the Fintech space in India and its use to enhance financial inclusion of MSMEs. This committee will consider various issues relating to development of Fintech space with a view to make Fintech related regulations more flexible and to boost entrepreneurship. This is a welcome move. A substantial step in this direction will also push some key efforts of the government, including affordable housing, e-services delivery and digital payments.

I invite your opinions.

 
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MSMEs cant afford high cost loans
Bhagawath Prasad | Sat Sep 29 02:17:55 2018
NBFCs may be funding the market with super aggression and risk but they are detrimental to MSMSEs growth, I suggest not to fall in trap , first of all small businesses don't have profits , they operate with least minimum margins only to cover expenses, NBFCs charges and interest are pretty high , secondly their collection mechanism is nothing less than street rowdyism, if one instalment is not paid , you get 100 calls a day and four guys visit your office and make ruckus until you pay that one instalment,their collection staff misbehaves and torturously move around MSME floors.I don't know if government knows about their unruly behaviours,most of MSMEs are middle class families and their business is nothing but self-created employment and helps creating jobs for few others,naturally, these middle-class can't face society whenever their businesses are down and look for ending their lives,Whatever I have seen and observed,MSMEs can only afford low-cost and subsidised funding from nationalised banks,unfortunately governments are doing nothing but head-line managements by releasing schemes that would not help and don't get implemented,Current scenario of job market,if you have a rough face and sharp tongue,you can get a job in NBFC at collection department,Fintech who took you to NBFC has taken his commission and vanished,Private bank funding is nothing but legalized Sindhi and marwari funding,it only helps them and government revenue, not good for MSME,we need hand-help approach


Loan
N , K Sharma | Thu Aug 23 10:10:09 2018
How to get a loan being MSME registered firm.


finance
s k agarwal | Thu Aug 23 05:50:52 2018
please inform the contact details to get finance for an e commerce start up.


SMS'S FUNDING BY FINTECH COMPANIES
ANIL ARYA | Wed Aug 22 07:53:29 2018
READ YOUR ARTICLE ON FINANCING OF SMS'S BY FIN TECH FIRMS. IT APPEARS GOOD IDEA BECAUSE PSU BANKS ARE TIED WITH THEIR CONVENTIONAL AND BUREACRATIC APPROACH. PSU BANKS OR OTHER GOVT BODIES INVOLVED IN SMS'S FUNDING ARE NEVER KEEN TO FUND SMALL TO MEDIUM UNITS BECAUSE THESE PEOPLE DO NOT OFFER SUFFICIENT MORTAGAGE. SO EITHER SMS'S ARE NOT FINANCED OR UNDERFINANCED. FINETECH COMPANIES ARE GOOD ALTERNATIVE DEPENDING ON THEIR APPROACH. EVEN THE WRITER OF THIS MAIL IS LOOKING FOR FUNDING OF ABOUT RS. 10 CRORES. CAN YOU SUGGEST FEW SUCH FIRMS WHO ARE INVOLVED IN SUCH FUNDING ACTIVITY. OUR PROJECT IS IN SUN RISE AND FAST GROWTH LANE.


 
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