India

SME Finance Forum member Mambu has signed a deal with Kreditech, the leading technology group for digital consumer lending using machine-learning based underwriting, to support the online lender’s entry into the Indian market. Kreditech currently operates in Europe and Latin America and will expand into India in early 2018, together with its partner PayU, a global online payments provider and Mambu client in Latin America. Mambu’s SaaS banking engine will empower Kreditech to launch a short-term lending product specifically tailored to local consumer and regulatory needs.

This is one of five companion reports that examine the role of social enterprise in women’s empowerment in each of the five surveyed countries (Brazil, India, Pakistan, the UK and USA). The British Council report aims to significantly enhance the knowledge of the role that social enterprise plays in empowering women and girls in India – notably by delivering training and creating jobs, by providing a source of funding for women's rights organisations, and by changing the power dynamic seen in other philanthropic models between the 'empowerer' and the 'empowered'.

Abhay Bhutada writes that MSMEs are one of the chief contributors to the Indian economy, other than startups and established enterprises. He says that while contributing eight percent to the nation’s total GDP, MSMEs also provide for 40 percent of the total export. Producing over 10,000 different types of products, these small-scale ventures are also responsible for 45 percent of the entire manufacturing output.

As part of a study to identify whether basic math skills contribute to entrepreneurial success in rural India, Madura Microfinance conducted a study on the numerical capabilities of microentrepreneurs. Of the 198 microentrepreneurs surveyed, 85 percent had completed a tenth grade education or more. The test covered basic arithmetic operations with and without decimals. The test was done first by manual calculation (by hand). Then participants were given time to repeat the exercise with a calculator.

SME Finance Forum member, State Bank of India announced its the launch of SME Assist, an initiative that will start offering short term loans to its MSME customers. It will render working capital loans to MSMEs according to their input credit tax.

Women MSMEs in India play a critical role in generating high rates of employment growth and accounting for a major share of industrial production and exports. Production from the MSME sector accounts for 15% of India's GDP and the sector is estimated to employ around 70 million people. Collectively, women employ over 8 million people, contributing 3.09 percent of industrial output.

Micro, Small and Medium Enterprises (MSMEs) continue to be citadels adorning the industrial map of India. The recommendations of Dr Prabhat Kumar Committee hold promise for unveiling a new chapter in the Indian business ecosystem for crafting a MSME policy. An enabling and integrated MSME policy for well-functioning and sick MSMEs will provide equal importance to agriculture, manufacturing and service sectors, thereby increasing MSMEs’ share in both private and public spaces.

The inability to provide collateral has been a major hindrance for small and medium enterprises (SMEs) seeking loans to fund their working capital needs, finance their expansion or take advantage of growth opportunities. Although the government has been taking steps to provide the necessary financing to SMEs, traditional lending institutions offer generic credit products to SMEs.

India’s more than 50-million strong SME sector, employs close to 40 percent of the country’s total workforce and contributes 45 percent of the total industrial output. While large banks and NBFCs have catered to SME loan requirements in the past, there is still a huge gap to be bridged between demand and supply.