MSME is the backbone of Indian economy for employment and development, says Dr. Bhagwat Kharad, MoS, Ministry of Finance, Govt. of India

 by Priya Jadhav 

SME Finance Forum 2023 commence their 9th edition of the Global SME Finance Forum 2023 in Mumbai

Mumbai, 13 September 2023: The SME Finance Forum, a dynamic platform fostering SME financing, kick started its three-day conference today in Mumbai. The theme for this year’s event is, "Digital Ecosystems and the Future of SME Finance”. The conference is co-hosted by Small Industries Development Bank of India (SIDBI) and Indian Bank’s Association (IBA). Over the three-day, 700 participants will attend the event from senior bankers, tech luminaries, to thought leaders from 70 countries and 250 institutions, to discuss digital ecosystems and future of SME finance.

The conference began with the auspicious lighting of the lamp ceremony by the Chief Guest of the event, Dr Bhagwat Kishanrao Karad, Hon’ble Minister of State, Department of Finance, Government of India.

Dr Bhagwat Karad, highlighted that, “MSME plays a very important role in the development of the Indian economy. Currently around 6.3 crore MSME enterprises are working in India and have generated around 11.1 crore employment opportunities. Around 30% of GDP comes from MSME and the growth rate every year is 10 percent.”

He further added that, “The government of India under the leadership of Hon’ble PM Narender Modi has been proactive in removing hurdles for the SME sector, and together with the banking sector, we strive to make financing easily accessible to fuel the growth of these vital enterprises.”

During the fireside chat session themed Digital ecosystems for the future of SME finance & financial inclusion, Mr. Nandan Nilekani, Co-founder and Chairman of the Board, Infosys, said “SMEs are the biggest beneficiaries of Digital Public Infrastructure (DPI). India is building public trails to access credit and market benefiting SMEs. More than 50 million merchants are opting for digital mode of payment. Digitization helped us generate balance sheet quicker as all the financial details like invoices, transactions, tax credits are easily accessible. Digitization also reduces turnaround time to get loans. In the next 5 years at least 50 countries are going to implement DPI..”

Commenting on the Global SME Finance Forum 2023, Mr. Sivasubramanian Ramann, Chairman & MD, SIDBI, said, “I am grateful for the opportunity extended to SIDBI for hosting such a prestigious event that has witnessed tremendous participation of industry stakeholders across the world and encouraged discussions on very relevant issues and trends on the SME Sector. With India taking the presidency of the G20 for the first time, the country’s views, and outlook on the MSME sector is of significance for the world. The strides made by the Government of India in developing a robust digital infrastructure and the consequent digital innovation by various players in MSME credit domain needs to be discussed, encouraged as also celebrated.

Mr. Dinesh Khara, Chairman, SBI, who joined virtually in the session titled Unlocking the potential of digital platforms for SME financing said, “In the last ten years, we have witnessed a significant transformation in our bank. There has been a prominent shift from a collateral based lending model to a data-based lending, which has further assisted us in reducing the bank’s overall operational costs. Digitalization has also helped vendors in making faster and more convenient payments, streamlining the MSME loan process. Additionally, digital platforms have been instrumental in catering to the needs of SME customers and creating value for them.”

Ms. Shalini Warrier, Executive Director, Federal Bank said during that same panel, "In the past, banking operations were primarily conducted manually. However, in recent years, a significant evolution has occurred, with digital technology taking the lead in the sector. One of the notable advancement is the convenience of online is payments through QR codes provided by UPI apps. Nowadays, a substantial portion of transactions occurs digitally on a daily basis, surpassing other traditional payment methods."

Thampy Koshy, CEO, ONDC, Matthew Saal, Principal Industry Specialist, IFC, and other eminent speakers discussed the role of marketplaces in the SME finance ecosystems.  Key issues faced by the MSME sector in terms of flow of credit, ease of doing business and market facilitation were addressed and solutions through use of digital technologies were also mentioned.