RBI Deputy Governor N S Vishwanathan on Monday highlighted various measures taken by the government to increase flow of finances to the MSME sector.

Giving the inaugural address to a two-day conference, 'Financial Services to SMEs in an Increasingly Digital Ecosystem', Vishwanathan mentioned the mandate to banks to provide a fixed percentage of their lending to this sector.

RBI has introduced the Trade Receivables electronic Discount System (TReDS) to address delays in recovery. Steps have been taken to strengthen the credit bureaus, he added.

And it is work in progress to formulate legal amendments to address the ever-expanding data pool and how it can be used by the financial sector players for credit assessment, he said.

Vishwanathan pointed out that problems in MSME are not just financial alone; "There are several other areas that they need support from," he said.

He pointed out that credit to the sector has grown."Bank advances to the MSME sector have clocked an impressive year-on-year growth of 8.9% during the first quarter of '18-'19. This indicates that the credit flow to the sector has turned robust."

"Financial inclusion through NBFCs has been enabled by fintechs and artificial intelligence," he added.

In his address, Vishwanathan highlighted the importance of the MSME sector. "The MSME sector plays an important role in any economy, and India is no exception," he said.

Recognising their role as providers of employment and generators of export, the Government and RBI have taken affirmative measures to strengthen the sector. And in order to ensure that the larger entities within the sector do not crowd out the smaller ones, the banks have been given specific targets to address the latter group, he added.