Fintech solutions to small business credit woes
ET Spotlight
All the things I could do if I had a little money” goes a line from the song “Money, Money, Money” by the Swedish pop group ABBA in the 1970s, a humongous success in its time. It is a sentiment those running micro, small and medium enterprises (MSMEs) would heartily endorse. MSMEs are a vast and diverse category of nearly eight crore units contributing around 35 per cent of GDP, but almost all of them have one feature in common – they find it hard to raise finance. Unable to satisfy the rigorous lending criteria of banks and non banking finance companies (NBFCs), weighed down by buyers’ delay payments and suppliers clamouring for quick settlements, most find themselves struggling for working capital, and can hardly think of capacity expansion, even when their businesses are doing fairly well. The MSME credit gap has been estimated at Rs 16 lakh crore ($215 billion).