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 idea is that when you sign up for the Udyam portal, you automatically get a credit card which is the Vyapar credit card. Every institution can decide how big a line of credit they want to give and with that they establish your payment history,” committee chairman Jayant Sinha was quoted in a report by the aforementioned publication.
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.
An appeal from Swarajya
At Swarajya, we rely on our readers' support through subscriptions to sustain our media platform. Unlike larger conglomerates, we are unable to relentlessly chase advertising money — our model is largely built on your patronage.
Your support has never been more crucial. We work tirelessly to deliver 10-15 high-quality articles daily, ensuring you receive insightful content from 7 AM to 10 PM.
If you believe India's story has to be articulated in a way it has never been done before without shrugging it off, become a patron (or) subscribe now for ₹̶2̶4̶0̶0̶ ₹1999 and get 12 print issues, unlimited digital access for 1 year, a special India that is Bharat T-shirt (Offer ends soon).
We are counting on you!