Microfinance institutions are integral to fuelling the country’s growth, India’s G20 sherpa Amitabh Kant said on Thursday.
“I have been a long-term believer that microfinance institutions are the most important institutions in our country. They will play a key role in ensuring that the country grows in an inclusive manner, ” he said at an event organised by Microfinance Institutions Network.
In his speech, Kant noted that India’s next phase of growth must be funded by credit. In this regard, the ability to penetrate into rural areas will be key to improve India’s credit-to-Gross Domestic Product ratio.
Kant noted that one cannot have a scenario wherein only certain regions in India are growing. Here, the onus of creating an inclusive India is on microfinance institutions.
Currently, agriculture contributes 42% to India’s economy even as global economies are shifting to enterprise-based from agriculture-based. Here, Kant feels that a higher flow of credit will fuel entrepreneurship in India.
“We have done the building blocks of building digitisation. My belief is that after building infrastructure, opening bank accounts, this phase of our growth has to be fuelled by credit in a very big way,” he said.
Separately, Small Industries Development Bank of India chairman and managing director Sivasubramanian Ramann sought the assistance of microfinance institutions for onboarding micro, small and medium-sized enterprises borrowers on to the Udyam assist portal.
“In the last four months, we have onboarded 1 crore fresh MSMEs on to the portal. We hope so do over 1 crore from now to March. I ask all you to get your teams to work. It is a fairly easy push of data on to the portal,” Ramann said.
Additionally, he said that an increase in adoption of credit on unified payments interface(UPI) will help microfinance institutions grow further.