Parliamentary Panel Proposes Credit Cards To MSME Entrepreneurs To Formalise Financing

The Parliamentary standing committee on finance has proposed providing credit cards to MSME entrepreneurs, Economic Times (ET) reports.

The card is expected to help small businesses with working capital, bring about trade financing for their revenues and also help in giving them capital loans at affordable interest rates.

The move aims to put in place a system for payment schemes and amidst the Small Industries Development Bank of India’s (SIDBI) ongoing attempts to help small businesses gain access to regular credit.

The panel has noted that less than 40 per cent of the existing 6.34 MSMEs have borrowed from the formal financial systems.

The total credit gap in the sector is anticipated to be around Rs 20-25 lakh crore currently. Sinha claimed that that there was absence of reliable data regarding the enterprises operating in this sector and hence advocated the creation of an integrated digital ecosystem.