Micro, small and medium enterprises (MSMEs) are a key part of the Indian economy. “India is home to over six crore MSMEs; 30 per cent of the GDP (gross domestic product) is attributed to them; 40 per cent of India’s exports come from the sector,” said Ashish Agarwal, director, Resurgent India Limited, speaking at Resurgent India’s virtual session, 'International Trade Finance – Opportunities for MSMEs'.
These numbers are encouraging. MSMEs have generated lakhs of employment. Yet, they haven’t been able to propel forward the way they should have. This could be attributed to the lack of steady and timely credit flow. Unable to show collateral, many MSMEs are compelled to function in an informal and less institutionalised manner. Hence, they are incapable of scaling up their production. All this is about the change.
Other than banks, newer financing models can be perceived as a means of addressing the credit gap. This is where non-banking financial...