Digital illiteracy among micro units one of the challenges in credit support: SBI’s Rana Ashutosh Kumar Singh

Credit and Finance for MSMEs: SBI has 341 Financial Literacy Centres (FLCs) across 28 states and five union territories, according to the bank’s website. The RBI back in February 2009 had asked banks to set up FLCs to offer free financial literacy.

Digital illiteracy among micro units one of the challenges in credit support: SBI’s Rana Ashutosh Kumar Singh
On the sidelines of the FE MSME Business Conclave in June, Singh also hailed the government’s Jan Samarth portal in enabling faster credit access for micro units. (Image: FE)

By Prerna M

Credit and Finance for MSMEs: Even as digital outreach exists for a large number of micro enterprises based in India’s hinterland, digital illiteracy perhaps among some of these enterprises is one of the challenges in providing credit support, said Rana Ashutosh Kumar Singh, Deputy MD (Transaction Banking & New Initiatives), State Bank of India (SBI). Singh also called for the need to have more financial literacy among such enterprises. “Banks are doing this. The Reserve Bank of India (RBI) also does this. We also have counselling centres. So things are improving already.”

SBI has 341 Financial Literacy Centres (FLCs) across 28 states and five union territories, according to the bank’s website. The RBI back in February 2009 had asked banks to set up FLCs to offer free financial literacy and credit counselling to all segments of society.

On the sidelines of the FE MSME Business Conclave in June, Singh also hailed the government’s Jan Samarth portal launched by Prime Minister Narendra Modi in June this year in enabling faster credit access for micro units.

“This is essentially (a portal for) 13 credit-linked government schemes where you have end-to-end digitisation. From application sourcing to sanction or disbursement, the process is fully digitized. So this kind of activity and innovations are happening particularly in the micro sector,” he added.

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Among the 13 schemes, loans for business activities are provided under Prime Minister’s Employment Generation Programme (PMEGP), Weaver Mudra Scheme, Mudra Yojna, PM SVANidhi, Self Employment Scheme for Rehabilitation of Manual Scavengers, and StandUp India scheme through the Jan Samarth portal.

Singh also noted the role of cash flow-based lending to support MSMEs. “Bankers, other lenders or NBFCs also have the MSME data flowing directly from the GST portal. With the visibility of the actual cash flows of the company, credit decisioning becomes much easier. Also, with the account aggregator framework, it will be a lot easier (to support MSMEs).”

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