Generally, it’s said that MSMEs are considered the backbone of India’s economy. Yet, there’s said to be a $530 billion credit gap for these ventures. But, are how banks assess risk and how MSMEs assess capital changing? In 2024 and beyond, could banks in India offer customized solutions that transcend traditional financial support? Could risk perception change from the lender to the borrower? Could better use of data enable financial institutions to intervene before an irrevocable moment of default takes place for MSMEs? And would that mean narrowing data asymmetry with something, like India’s digital public infrastructure?
In this episode of “Udyamita Ki Aas, CGTMSE Ke Saath”, Sandeep Varma, Former CEO – CGTMSE and Country Head – SIDBI, & Praloy Majumder, Founder and CEO – Disseminare Consulting, explore the complexities of MSME lending in India, dealing with predatory lending, how banks could assess credit risk more objectively through data in smarter formats, potential lending scenarios, how MSMEs may not always be high-risk borrowers, securing preferential lending terms for MSMEs, debunking the notion that these small ventures don’t contribute more to NPAs than larger corporations, whether there could be early warning systems to mitigate risks, the role that the ONDC can play, whether a risk assessment model rooted in game theory could be a panacea to what ails both financial institutions and MSMEs, assessing the cost of default and the benefit of default, when it comes to the borrower, what the future of banking in India looks like and more.
Do MSMEs Deserve Better? Debunking Lending Myths w/ Sandeep Varma & Praloy Majumder
By teamrizing
