{"id":21709,"date":"2020-12-12T12:15:40","date_gmt":"2020-12-12T06:45:40","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=21709"},"modified":"2020-12-15T12:11:23","modified_gmt":"2020-12-15T06:41:23","slug":"digital-lending-under-msmes","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/digital-lending-under-msmes\/","title":{"rendered":"An Overview on Digital Lending Under MSMEs"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Small businesses can be considered as the backbone of India\u2019s growing economy. There are 50 to 60 million micro small and medium enterprises (MSMEs) over there in India. <a href=\"https:\/\/corpbiz.io\/msme-registration\"><strong>MSMEs<\/strong><\/a> are employing around 110 million individuals where its significant subsidising GDP, exports, and employment, digital lending under MSMEs played a vital role in the nation\u2019s growth.<\/p>\n\n\n\n<p>Digital\nLending under MSMEs is a process in which the loan can grant to the borrowers by using\nelectronic media. In other words, it can be considered as all mechanism of\nlending is to be done by the digital medium. It involves the use of online\ntechnology to provide a loan to customers.&nbsp;Digital lending under MSME can\nbe an online loan application offered by banks or credit unions on their\nwebsite to better of their customer satisfaction.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/digital-lending-under-msmes\/#Crisis_of_Restraining_the_Covid_19_Spread_Economic_Instability\" >Crisis of Restraining the Covid 19 Spread &amp; Economic Instability<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/digital-lending-under-msmes\/#What_Type_of_Business_Cover_under_the_MSMEs\" >What Type of Business Cover under the MSMEs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/digital-lending-under-msmes\/#Overview_on_Digital_Lending_In_MSME_in_Consonance_with_Transforming_Fintech\" >Overview on Digital Lending In MSME in Consonance with Transforming Fintech<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/digital-lending-under-msmes\/#Why_Digital_Lending_Is_Considered_As_A_Game_Changer_For_MSMEs\" >Why Digital Lending Is Considered As A Game Changer For MSMEs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/digital-lending-under-msmes\/#Why_Is_Digital_Lending_Growing_Fast_Among_The_MSMEs\" >Why Is Digital Lending Growing Fast Among The MSMEs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/digital-lending-under-msmes\/#What_Are_The_Devoting_Aspects_Of_Digital_Lending_Under_MSMEs\" >What Are The Devoting Aspects Of Digital Lending Under MSMEs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/digital-lending-under-msmes\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Crisis_of_Restraining_the_Covid_19_Spread_Economic_Instability\"><\/span>Crisis of Restraining the Covid 19 Spread &amp; Economic Instability<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>MSMEs mean for Micro Small and Medium Enterprises, The ministry of MSMEs regulated by the Government of India and the <strong>Micro, Small and Medium Enterprises Development (MSMED) Act<\/strong><sup><a href=\"https:\/\/msme.gov.in\/know-about-msme\"><strong>[1]<\/strong><\/a><\/sup><strong>,<\/strong> enacted by the Government of India on dated 16th June 2006. The Definition of MSMEs is further divided into two broad categories. As the world under the reels of the Covid 19 pandemic situation, India is facing with twin crisis of restraining the Covid 19 spread &amp; economic instability. <\/p>\n\n\n\n<p>In 2019 MSMEs have devoted its 29 % income for the national GDP\nand the Indian Government has the determination to increase the MSMEs sector subsidizing\nup to 50 percent income in the next coming years. While the MSMEs were\nconsidered production drivers of the Indian economy, the worldwide pandemic\neffect of Covid 19 &amp; consequent stoppage of economic activities triggered\nconcern across the nation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Type_of_Business_Cover_under_the_MSMEs\"><\/span>What Type of Business Cover under the MSMEs?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The broad categorization of business cover under the MSMEs is as follows:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Type-of-Business-Covered-under-the-MSMEs.png\" alt=\"Type of Business Cover under the MSMEs\" class=\"wp-image-21729\" width=\"540\" height=\"325\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Type-of-Business-Covered-under-the-MSMEs.png 1000w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Type-of-Business-Covered-under-the-MSMEs-300x181.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Type-of-Business-Covered-under-the-MSMEs-768x463.png 768w\" sizes=\"(max-width: 540px) 100vw, 540px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Companies in the Manufacturing Sector<\/h3>\n\n\n\n<p>Industries involved in the manufacturing of goods or production\nof goods industries mentioned in the first schedule of Industries (Development\n&amp; Regulation Act) 1951 are included within the purview of the MSMEs.<\/p>\n\n\n\n<p>Also, enterprises employing plant &amp; machinery to increase\nthe worth of finished product that comes out with a distinct name, use or\ncharacter covers under the scope of micro small &amp; medium enterprises\nmeaning. As per their annual turnover, the enterprises are classified under the\nsubcategories are as follows.<\/p>\n\n\n\n<ul><li><strong>Micro enterprises<\/strong>&nbsp;\u2013 Companies whose\nannual turnover does not exceed more than Rs.5 crore.<\/li><li><strong>Small enterprises<\/strong>&nbsp;\u2013 Companies whose\nannual turnover remains between Rs.5 crore and Rs.50 crore.<\/li><li><strong>Medium enterprises<\/strong>&nbsp;\u2013 Companies whose\nannual turnover remains between 50 crore and Rs.100 crores.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">&nbsp;Companies in the Service Sector<\/h3>\n\n\n\n<p>The effect of MSMEs also extends to\nenterprises in the service sector. The sub-categorizationof MSMEs in the\nservice sector basis on their annual turnover are as follows:<\/p>\n\n\n\n<ul><li><strong>Micro Enterprises<\/strong>&nbsp;\u2013 Companies whose\nannual turnover under Rs.5 crore.<\/li><li><strong>Small Enterprises<\/strong>&nbsp;\u2013 Companies whose\nannual turnover remains from Rs.5 crore and Rs.50 crore.<\/li><li><strong>Medium Enterprises<\/strong>&nbsp;\u2013 Companies whose\nannual turnover remains from Rs.50 crore and Rs.100 crore.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Overview_on_Digital_Lending_In_MSME_in_Consonance_with_Transforming_Fintech\"><\/span>Overview on Digital Lending In MSME in Consonance with Transforming Fintech<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Digital lending and fintech are transforming the structure of\nthe MSMEs in India. Banks have started to move fast to ratify the digital\necosystem and automate the backend process to reap the short-term and long-term\nbenefits. The end-to-end digitization will reinforce the bank in compressing\nturnaround time for decisions and diminish the processing cost involved in\nthese units. This shall give not only timely access to funds but also decrease\nthe cost of the loans.<\/p>\n\n\n\n<p>Given the ongoing challenge &amp; restrictions of physical loan\ndisbursements due to the spread of coronavirus, Digital lending under MSME will\nconvince the safety of staff &amp; customers from the Covid-19.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The Potential of Digital Lending Under MSMES Rejuvenation<\/h3>\n\n\n\n<p>The Indian Government announced the\nvarious steps for the revitalization of the MSMEs sector, In May 2020; Finance\nMinister Nirmala Sitharaman publicized six COVID-19 relief measures to make\nMSMEs \u2018Aatmanirbhar\u2019 (self-dependent).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_Digital_Lending_Is_Considered_As_A_Game_Changer_For_MSMEs\"><\/span>Why Digital Lending Is Considered As A Game Changer For MSMEs?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Government standardized the bank\nto support the government&#8217;s schemes for the betterment of stress MSMEs such as\nCredit Line Guarantee (ECLG). The Government has supervised the public &amp;\nprivate sectors to offer help and to precipitate the volume of financial\nsupport required to stretch out the businesses from facing a huge economic\ncrisis. The whole lending &amp; financial ecosystem needs to uphold the MSMEs\nwith agile credit solutions for a macroeconomic impact.<\/p>\n\n\n\n<p>In the present scenario, digital\nlending by fintech players can undoubtedly benefit MSMEs to emerge out of the\ncrisis &amp; aid in India from the recovery of pandemic Covid 19 situation. A\nline of credit will aid MSMEs to get access to agile capital, especially as the\nfund cycle rattled either by supply-chain wreckage, labour issues, or adverse\ncash due to the movement of national lockdown imposed by the Indian Government.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_Is_Digital_Lending_Growing_Fast_Among_The_MSMEs\"><\/span>Why Is Digital Lending Growing Fast Among The MSMEs?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Indian government has given the serenity access and a smooth process of securing loans due to this Digital Lending under the MSME growing fast compared to the traditional source of lending.<\/p>\n\n\n\n<p>There was a time when the loan application was determined traditionally based on several financial information and documentation like tax returns, credit report, bill payment, etc. Still, after the digital lending, the digital lender can quickly analyze the loan &amp; the interest rate for which the borrower is eligible or not.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Why-Is-Digital-Lending-Growing-Fast-Among-The-MSMEs.png\" alt=\"Digital Lending Growing Fast Among The MSMEs\" class=\"wp-image-21733\" width=\"495\" height=\"495\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Why-Is-Digital-Lending-Growing-Fast-Among-The-MSMEs.png 1000w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Why-Is-Digital-Lending-Growing-Fast-Among-The-MSMEs-150x150.png 150w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Why-Is-Digital-Lending-Growing-Fast-Among-The-MSMEs-300x300.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Why-Is-Digital-Lending-Growing-Fast-Among-The-MSMEs-768x768.png 768w\" sizes=\"(max-width: 495px) 100vw, 495px\" \/><\/figure><\/div>\n\n\n\n<p>As compared to the precise sources of data like bank\nstatements, ID cards, the lender can calculate the borrower&#8217;s financial history\nby evaluating the person&#8217;s habits. Moreover, with the help of &#8220;<strong>Artificial Intelligence,&#8221;<\/strong>&nbsp;digital\nlenders can investigate the borrower&#8217;s economic history more efficiently.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Are_The_Devoting_Aspects_Of_Digital_Lending_Under_MSMEs\"><\/span>What Are The Devoting Aspects Of Digital Lending Under MSMEs?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The devoting factors for digital lending under MSMEs are that\nhave used for reiterate are as follows:-<\/p>\n\n\n\n<ul><li>MSMEs are digitizing their operations and\ntheir credit acquisitions quickly;<\/li><li>75% of MSMEs allocating data digitally and;<\/li><li>47% of MSMEs handling digital tools for\naccounting, payment, or sales purposes.<\/li><li>Credit chain value is digitizing; therefore,\nMSMEs can have access to funding.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Every coin has two sides like that every process has its merits\nas well demerits. It depends on how we are using it. Indian economy is supposed\nto reach on giant stalked leading within the coming years, and MSMEs are ready\nto create a symbolic mark towards accomplishing that. <\/p>\n\n\n\n<p>Digital lending can be profitable for MSMEs in both sectors as well as for customers. It is expected from a traditional money lender to adopt the digital lending process efficiently and use the new technology to decrease the rate of interest. Digital lending requires less expense, and establishes the documentation in an automated and modernizes the way follow-ups are conducted with the borrowers. You may kindly associate with a <a href=\"https:\/\/corpbiz.io\/\"><strong>Corpbiz<\/strong><\/a> expert, if you want to learn and get assistance on Digital Lending under MSMEs.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/prominent-challenges-faced-by-the-msme-in-our-country\/\">\nAn Outline on the Prominent Challenges faced by the MSME in Our Country\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Small businesses can be considered as the backbone of India\u2019s growing economy. There are 50 to 60 million micro small and medium enterprises (MSMEs) over there in India. MSMEs are employing around 110 million individuals where its significant subsidising GDP, exports, and employment, digital lending under MSMEs played a vital role in the nation\u2019s growth. [&hellip;]<\/p>\n","protected":false},"author":32,"featured_media":21712,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[176],"tags":[1312],"acf":{"service_id":"71"},"authorName":"Komal Singh","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/processed.jpeg","authorDescription":"Komal Singh is a Legal scholar, having diverse experience in scripting research papers, articles &amp; dissertations, which serves her main interest &amp; competent in drafting legal documents. She has polished her skills in dealing with the matter related to consumer affairs and now building intelligible Legal Content for Corpbiz.","postViews":4263,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/21709"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/32"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=21709"}],"version-history":[{"count":23,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/21709\/revisions"}],"predecessor-version":[{"id":21735,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/21709\/revisions\/21735"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/21712"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=21709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=21709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=21709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}