Digital Footprint to help MSME get up to Rs 5 L loans from Muthoot FinCorp ONE
Muthoot FinCorp ONE just on the basis of the daily transactions they do using QR-code. Muthoot FinCorp ONE, a strategic business unit and the digital platform of Muthoot FinCorp Ltd (MFL) will offer loans with daily repayment options to Micro, Small and Medium Enterprises (MSME) that use QR-code based apps for daily collections, the NBFC said in a statement.
This is in line with a 'New Credit Assessment Model' for small businesses, which Finance Minister Nirmala Sitharaman had announced in her Budget presentation on July 23. Under the model, banks were required to assess small businesses based on their 'digital footprints' and not on their balance sheets.
According to a report by IFC (International Finance Corporation), India's nearly 6 crore MSMEs contribute 31 per cent to the GDP, employ nearly 13 crore people, and make up 45 per cent of exports. Yet, despite being the backbone of the economy, they remain extremely credit-starved. The current addressable credit gap for MSME in India runs into a few lakh crore rupees.
«This lending product leverages QR-code transaction histories to offer credit to small business owners who often lack formal financial access despite demonstrating strong cash flows,» the Muthoot statement said.
Muthoot FinCorp ONE also helps them grow as their loan repayment is simplified through automated daily deductions/repayments, thereby providing financial flexibility.
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