“About 2 lakh loans of 1 lakh ticket sizes have been given out and 75 per cent of these are women borrowers, said Sivasubramanian Ramann, CMD, SIDBI, while speaking on the first day of the IVCA Conclave 2024 in Mumbai. “I can sense that from the JLG/SHG, there is a gradual movement away from group loans and into individual loans,” he said.
The panel discussion titled “200Mn+ Entrepreneurial Households: An EPIC Growth Opportunity” saw participation from industry leaders Munish Sharda, Group Executive, Retail Assets & Bharat Banking, Axis Bank, and Utpal Isser, Co-founder, Sarvagram, and it was moderated by Jyotsna Krishnan, Managing Partner, Elevar Equity.
There exists an estimated 200 million+ “entrepreneurial households” in India, characterised as having a driving hunger to succeed and rise through. By employing innovation and passion, these households, primarily located in tier-II and -III cities – “Bharat” – are expected to lead India to several peaks.
Sivasubramanian Ramann said that by committing around Rs 9,800 crore, the industry has raised an additional Rs 56,00 crore from the market. On the topic of entrepreneurial households, he continued, “It’s truly amazing to read about the sheer entrepreneurship and the industriousness of those households. I have seen it in various trips I make.”
He highlighted how women in tier-II and -III regions are becoming economically successful and running businesses that are generating employment. On this, he added, “An unmistakable aspect of human life is when wealth is created, you’ll have everybody going in droves and wanting to be part of that wealth story.”
He continued, “How do we get this information in databases which are structured and which can then come across to all the bankers who would be delighted to have the information that can give us the due diligence of these people? Because most of this community is probably non-GST registered businesses.”
“In the next 3-4 years, we are looking at the demand for credit from the MSME sector which is Rs 30 trillion, while the entire MSME borrowing on date is Rs 25 trillion. So, we are actually looking at more than double of what we have got. How does that throughput go through is actually the big question that we have to ask ourselves,” said Sivasubramanian Ramann.
He also revealed how credit is being provided to businesses. “Some statistics on how COVID sort of played itself out: Under the 100 per cent sovereign guarantee that was provided during COVID-19 called ECLGS, Rs 3.64 lakh crore worth of loans were covered under ECLGS. We received NPA markings to the extent of Rs 17,000 crore, so that’s just 5 per cent of the total loans given out in a stressed period. I think that was remarkably low,” he said.
Indian Venture and Alternate Capital Association (IVCA) is a not-for-profit, apex industry body promoting the alternate capital industry and fostering a vibrant investing ecosystem in India. IVCA members are the most active domestic and global VCs, PEs, funds for infrastructure, real estate, credit funds, limited partners, investment companies, family offices, corporate VCs, and knowledge partners.