One-Stop Solution To SME's Credit Gap

Struggling to get loans in order to expand your company’s wings and charter into newer territories? Maybe, your sales invoice is the solution.

- Vanita Peter D’Souza

When the Central Government introduced the much-awaited Good and Services Tax (GST) in 2017 to the Indian economy, there were many concerns related to crossover from the existing tax regime. However, this new tax reform would probably help the country organize its small and medium enterprises sector, which contributes almost 30-35 percent to India’s GDP. To what degree the move succeeded is debatable as a great many experts are of the opinion that the GST would take considerable time to show positive results. However, in the era of analytics, what GST did is more applaudable – it has created a huge amount of financial data of companies. Earlier this year, while announcing the annual budget 2018-19, finance minister Arun Jaitley also shared that the Trade Receivables Discounting System (TReDS) platform could access the central GSTIN date. The platforms such as A.Treds, Receivables Exchange of India Ltd (RXIL) and M1 TReDs, that connect the SMEs to factors to discount their invoices can now use the GSTIN stack to verify the authenticity of the bills raised. The larger picture here what if the access to this data is extended to fintech platform that is trying to solve $60 billion SME credit gap in the domestic market?

Issues With the SME Financing