Credit and finance for MSMEs: While the digital footprint of MSMEs has increased over the past few years, particularly during Covid, and credit access has become affordable with the rise of digital lending platforms that enables collateral-free credit, the relationship between a bank and an MSME hasn’t been very smooth of late. According to Anil Bhardwaj who heads the prominent MSME industry body Federation of Indian Micro and Small & Medium Enterprises (FISME) as its Secretary General, the customer service by banks to their existing MSME customers has been poor.
“For example, if you want to change from one bank to another, the existing bank would levy pre-closure charges which could range between 2-4 per cent of the loan. This is despite the fact that banks themselves have signed onto the banking code which states that there would be no pre-payment charges levied on MSEs but banks still do it,” Bhardwaj told FE Aspire at SME Artha 2022 event recently. Listen in for more details.