Budget 2019: SME e-payment, free digital transactions, online credit in fintech push to drive financial inclusion

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Updated: July 8, 2019 2:01:57 PM

Budget 2019 India: The finance minister stressed on the easy credit access to MSMEs for which up to Rs 1 crore loan is introduced within 59 minutes through a dedicated online portal.

Budget 2019, Union Budget 2019 India, Budget 2019 India, Budget 2019-20Budget 2019-20: The minister highlighted the payment ecosystem for transport based on National Common Mobility Card standards launched by PM Modi in March this year.

Union Budget 2019 India: Financial technology (fintech) has no more remained as simply an enabler to the financial services ecosystem. Fintech has got embedded in it to the extent that its role has evolved from digital products and services in the financial services and banking segment to a much more strategic one of financial inclusion and digital payments. And some of the announcements made by finance minister Nirmala Sitharaman in her maiden budget speech on Friday gives further direction to that financial inclusion.

Nirmala Sitharaman, for instance, said that a payment platform for small businesses will be created for filing their bills to tide over their delayed payment issue from the government and eventually solving for their cash flows problem. “The Government is enhancing the rural infrastructure while also making it easier for Indian MSMEs to increase their digital footprint. The creation of a single-window platform for end-to-end bill payments of MSMEs is one of these steps and will augment digital adoption of Indian MSMEs,” said Vivek Tiwari, MD & CEO, Satya MicroCapital.

The finance minister also stressed on the easy credit access to MSMEs for which up to Rs 1 crore loan is introduced for MSMEs within 59 minutes through a dedicated online portal. “This is perfectly in line with the vision of financial inclusion. Both of these developments, that is, digital enablement and financial inclusion, will make it considerably easier to lend to the segment and unlock the true potential of this growth engine,” added Tiwari.

Also read: Budget 2019: How Nirmala Sitharaman’s maiden budget will boost rural economy through startups, SMEs

Another area according to the fintech players that would help boost the digital economy is encouraging NRIs to invest in India even as the finance minister proposed merging NRI portfolio route with FPI route and easing KYC norms for NRIs. “Another positive is the promotion of the digital economy and making digital transactions free for customers. That is the right step in boosting the digital economy. However, a bit disappointed that something with the impact potential of P2P was missed in the budget,” Abhishek Gandhi, co-founder and CFO, RupeeCircle, adding that steps taken to promote P2P in any way would help the sector which has been driving financial inclusion and creating an alternative investment asset class.

The minister had also highlighted the payment ecosystem for transport based on National Common Mobility Card standards launched by PM Modi in March this year to allow people to pay for different transport costs such as metro, toll tax across India.

“The government has taken many initiatives towards the development of digital infrastructure and to promote digital payments in the country. The drive towards usage of Inter-operable One Nation One transport card and the requirement for business establishments with annual turnover of Rs 50 crore to offer low-cost digital mode of payments such as BHIM, UPI, Aadhaar Pay etc., will further boost seamless digital payments in the country and propel us as a powerhouse in the global payments arena,” said Navtej Singh, CEO Digital Business, Hitachi Payment Services.

Moreover, according to PayMate’s director Ravi Vishvanathan, payments in cash attracting 2 per cent TDS on cash withdrawal from bank account exceeding Rs 1 crore in a year will be a big boost for digital payments.

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