SME Times News Bureau | 10 Jun, 2019
Rather than financing the small businesses
through just PSU banking channels, government should include private players
like NBFCs & Small Finance banks in the lending schemes in a larger way
which would widen the access of credit for small businesses, said Amit Saxena, MD & CEO, Unimoni, in an
exclusive interview with SME Times.
Excerpts of the interview …
Please tell our readers about Unimoni India and its entrepreneurial
journey. What services do you offer? What is your competitive edge?
Amit Saxena: Unimoni India, is a Non-Banking Financial
Company (NBFC) providing credit solutions, foreign exchange, payments and
wealth management offerings to its customers. Unimoni facilitates seamless
availability of credit as well as movement of money across India with a focus
on delivering convenience, speed and value to its customers.
In the financial services arena, NBFCs have
emerged as important intermediaries in providing finance to the underserved and
underbanked sections of the society. We, at Unimoni, called this segment as
‘India2’, which constitutes around 48-50% of the total population and are generally
middle-class salaried customers, small-business owners, self-employed
non-professionals; most of them possess their own bank accounts, but they lack
universal access to financial solutions.
At Unimoni, we are committed to drive the
agenda of financial empowerment by offering a comprehensive bouquet of
affordable financial products through multiple touch-points spanning retail
branches, digital and mobile channels. This way, we endeavour to support the
evolving demands of underpenetrated consumer finance and small business
markets, and consequently contribute to the overall growth trajectory of the
We have a full-stack financial offering of
loan, payments and wealth solutions. This gives us a competitive edge over
other NBFCs. Hence, we consider ourselves much more than a NBFC.
What are the major challenges Indian NBFCs are facing currently?
Amit Saxena: Of late, NBFC sector faced issues on
liquidity due to large ticket financing companies. There was no issue on retail
NBFCs, but the overall sentiment was affected.
Access and credit assessment are the core challenges
faced by NBFCs in India. According to the World Bank, 9 in 10 people from the
lower and middle-income countries around the world do not have a documented
credit history. Unimoni endeavours to create a universal financial solutions
platform for users through multiple touchpoints spanning the retail sector
(branch and agent network) and digital mediums (mobile app, web). Although the
factors to determine creditworthiness remains the same, not everyone fits into
the traditional model. This is where Unimoni, armed with advanced
tech-solutions, building big data analytics capability to develop advanced
credit scoring models that incorporate non-traditional data sources. This way,
the company can extend a lending hand to India’s creditworthy yet financially
underserved population, and simultaneously contribute towards achieving a goal
of financial empowerment for the society.
Why government has failed to address the credit crunch problem of the
sector despite so many schemes and policies?
Amit Saxena: The government had started various schemes
like Pradhan Mantri Mudra Yojna (PMMY), Credit Guarantee Fund Scheme for Micro
& Small Enterprises (CGMSE), Trade Receivables Discounting System (TReDS),
Stand-Up India for economically backward section and women entrepreneurs
majorly aimed at making affordable credit accessible to small businesses and
bringing them under the fold of formal financial system.
Despite so many schemes, the following
challenges remain in the system.
Lack of awareness: Tier 2 and tier 3 based small businesses are not completely aware
of the government schemes, lack financial knowledge and find it difficult to
make the most of these programmes. Schemes like Pradhan Mantri Mudra Yojna
(PMMY) should be marketed in these cities to increase awareness.
Include private players in the lending schemes: Rather than financing the small businesses through just PSU banking
channels, government should include private players like NBFCs & Small
Finance banks in the lending schemes in a larger way which would widen the access
of credit for small businesses.
Besides credit unavailability and high interest rates, what according to
you are the main hurdles to the growth of the Indian MSME sector?
Amit Saxena: As per the Ministry of MSME Annual Report for
FY 18, we have more than 6 crores micro & small enterprises, generating an
employment for about 11 crore people which represent more than half of nation’s
working population. These firms further account 30 percent of India's GDP, the
While there are various reasons demonstrating
small businesses as the major contributor of economic growth, however, easy
access to finance is a key obstacle for them to scale up. Other factors that
create hindrance in the growth of small businesses include lack of availability
of adequate infrastructure, lack of availability of skilled labour and lack of
adequate power supply.
In the last few quarters, most of the
incremental credit to small businesses were coming from NBFCs. However, the
default by a large ticket financing company created a liquidity crunch in the
Do you expect the economy
to grow fast in the current financial year? What about credit growth?
Amit Saxena: There are various measures taken by the regulator
and government to increase liquidity in the market. RBI for instance, has
clearly focused on driving growth with the change in stance to neutral in its
latest policy and reduced rates of interest. There is a strong indication that
the regulator may further reduce rates in the coming months. This will help
drive consumption which in turn will invite credit inflow. The RBI also
announced harmonization of different categories of NBFCs to provide them with
higher flexibility in their operations.
At the same time, government in the recently
announced Union Budget, introduced a pension scheme for workers in unorganized
sector and relief for the farmers with a 2% interest subvention which would
result in increase of spending capability. All this will culminate in extra
demand for small business owners who in turn will need extra working capital to
meet these demands. We believe such decisions taken by the government will not
just enhance liquidity in the economy but also boost investment and give the economy
a positive growth phase.
Please tell us about your future plans.
Amit Saxena: We possess a strong footprint across the
country when it comes to offering a large product portfolio of loans, payments
and wealth solutions. We move forward with an aim to empower every individual
and fulfil our dream of making this nation ‘An Equal India’. The rising
penetration of internet and its potential to reach every nook and corner of
this country, has transformed the way we conduct businesses. It has simplified
the complex lending process and made it more technology-driven. Our emphasis
has been on building data analytics while advancing customer assessment tools
to providing our customers an easy access to our multi-product and
In the last couple of years, we have
witnessed a significant surge in demand for business loan and consumer lending solutions
and, our businesses are scalable to cater to this demand. We strive to offer
these services through a multi-partnership collaboration, which further enable
customers to overcome constraints and fulfil their all life-stage requirement
with financial services at the centre.