January 24, 2019
The Indian SME sector is important for inclusive development given its share of GDP and employment contribution, yet its potential remains unfulfilled. While the total contribution of SMEs to India’s manufacturing output is immense at 45%, SME financing lies in a state of distress. A significant barrier to their growth can be pinned down to a lack of access to formal banking and credit systems. It is estimated that 40% of MSME lending is done through the informal sector where the interest rates can be at least twice the prevailing rates in the market. The SME landscape is witnessing a rapid change with the advent of digital technologies, which can create an impactful opportunity for both traditional lenders and FinTechs.
To get a deeper understanding of the current SME financing problems, Rupeepower and MEDICI came together to hold a close round table discussion with some of the top bankers in to deliberate on the challenges and opportunities in the segment. Here are the excerpts of the discussion that followed:
There are several impediments restricting the traditional lending segment to service the small-ticket-lending requirements of the Indian SME industr ...