Latest News | Need to Create Specialised SME Digital Bank: Co-founder of Biz2Credit
Get latest articles and stories on Latest News at LatestLY. Ahead of the Union Budget, Rohit Arora, CEO and Co-Founder of Biz2X, has suggested the government needs to come out with a specialised SME digital bank to cater to the funding needs of small businesses.
New Delhi, Jan 23 (PTI) Ahead of the Union Budget, Rohit Arora, CEO and Co-Founder of Biz2X, has suggested the government needs to come out with a specialised SME digital bank to cater to the funding needs of small businesses.
Finance Minister Nirmala Sitharaman will present the last full Budget before the 2024 general elections in the Lok Sabha on February 1, wherein she is expected to announce slew of measures to boost economic growth.
Arora said that small and medium businesses perennially face credit shortage and it is time that the government should come out with a specialised bank to cater their requirements.
"SME digital bank can provide a bouquet of services to MSMEs, such as business CASA accounts for transaction banking, invoice and payments processing, correspondent banking, SME credit and trade finance, and other business financial services," he said.
Biz2X is a turnkey global SaaS platform that enables financial institutions to provide a customised online lending experience for their small and mid-size business customers.
Further, Arora stressed that such a bank can also include a special portfolio of revenue-linked credit instruments that will address the credit needs of MSMEs and also help in diversifying SME credit vis-à-vis the present system of collateral-based financing, which restrains the very practicality of running a small business.
Being completely digital, he said such banks can process quicker loan application and disbursals for SMEs, backed by advanced data analytics and technology-based decision making.
"The current system of portfolio mapping and underwriting is an arduous and time consuming process, involving exhaustive documentations and required multiple visits to banks. Digital banking will quicken loan processing, lower risk and scale up faster, meeting the credit needs of small businesses," he said.
He said many large sovereign funds, pension funds, multilateral agencies as well as large Indian private equity funds wants to invest in such an initiative, given its enormous economic potential.
About 6.3 crore MSMEs (Micro, Small and Medium Enterprises) provide more than 11 crore jobs in India.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)