The CEO of Niti Aayog, Amitabh Kant on Saturday said, among its global peers, India’s private credit-to-GDP ratio is the lowest. The government is in the works of putting a framework in place in order to push the credit towards untapped segments. Addressing an event that was virtually organized by GAME, (the Global Alliance for Mass Entrepreneurship) credit scenario in the recent years in India has seen a greater drag on the Indian economy said, Amitabh Kant.
Countries such as China and South Korea have had tremendous growth, massive improvement in their living standards on the back of high leverage, Amitabh Kant said. “Even Vietnam’s recent development has been partially a result of growth in its private debt,” he further stated.
The MSMEs (micro, small and medium enterprises) play a serious role in providing employment, but their credit needs are from the formal financial sectors are never fulfilled.
Amitabh Kant said: “The government is in the process of putting frameworks and protocols in place for credit to be pushed to segments that have largely been untapped.” Also noting that including the finance depends on the regulatory of the environment, Amitabh Kant stated that while there is a requirement for a new business model to fill the current void in getting back the necessary credit flow, there is also a need to change some regulations as per time and requirement.
the requirement of this process is bringing together all the stakeholders like banking and industry professionals. Moving ahead, the MSME sector will have more credit needs. As a result, more innovative methods will prove to be the key that meets required demands for the sector
The current gap in MSME is estimated to of Rs. 25 lakh crore. The government has been pushing for sooner validation of the economy and also on the credit fronts, and has also taken certain important steps.
Financial sectors are right now undergoing immense transformation according to Amitabh Kant, and there has been several dramatic changes in the status of India’s credit scenario as well.
There have been a flood of financial technology (fintech) players over the past few years. Who are bringing significant transformational changes in the way the country’s financial services are provided.
Amitabh Kant also highlighted that the government changed the definition of MSME’s to help the sector.