The whitepaper was unveiled by Ms. Neha Punater, Partner and Head – Fintech, KPMG in India today at the IMC’s 9th Banking and Financial Services Conference in Mumbai.
Different sources of capital are used by MSMEs across their lifecycle, and the traditional banking system still forms the largest source of financing. The last few years have seen a paradigm shift affecting the MSME financing ecosystem. We are seeing alternative sources of capital coming into existence and increasing reach, including crowd funding, online marketplaces, new age digital Non-Banking Financial Companies (NBFC), venture debt companies, etc. FinTechs have grown rapidly in this space as well, and are offering innovative solutions both for lenders as well as offering solutions addressing challenges faced by MSMEs. This new breed of lenders has emerged to address the need gap of micro and small businesses for financing. Ease of access to funding sources is something the new age MSMEs are looking for, and FinTech firms have hit the right chord by addressing this need.
Key aspects covered in the report:
The whitepaper also examines how several policy interventions along with technology and innovation will continue to play a pivotal role in creating a business-friendly atmosphere for the MSMEs.
“The creation and strengthening of the ecosystem of small businesses has many positive externalities on skilling, employment, wealth creation and overall nation-building. With the implementation of the Goods and Services Tax (GST) and the continued policy push on increasing the taxpayer base through ‘formalisation’ of the economy, it will be interesting to follow the journey in the coming years. We hope that MSME sector is able to finally resolve the paradoxes and reward entrepreneurship, which would have far-reaching benefits in a nation with a large young population and low rate of job creation in the formal economy. Digital technologies and the super computing power in the hands of consumers as well as service providers by way of mobile phones today, and possibly wearables or Virtual Reality gadgets tomorrow, combined with other innovations such as 3D printing and advances in robotics, will change the nature of workplaces of small businesses in a fundamental way.” said Neha Punater, Partner and Head – Fintech, KPMG in India.
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