Digital lenders are optimistic about 2021 and the budget implication on the sector in terms of liquidity support, impetus on digital infrastructure, incentivising the collaboration between banks and NBFCs among other things.
Satyam Kumar, CEO & Co-founder at LoanTap said, “For the upcoming budget session, we expect that the government will implement effective policies with respect to ensuring liquidity in the system, which in turn will enable financial inclusion. The government should also focus more on the development of digital infrastructure to help Fintech players enhance customer experience, credit quality, and streamline growth in FY 21-22.”
Lending to the small businesses, Lendingkart Co-founder and CEO Harshvardhan Lunia says, “The government’s sustained support to Fintechs serving MSMEs will help transform initiatives such as “Atmanirbhar Bharat” into successful realities and will also help set up the hub of opportunities in this industry. Governments push will in turn support increased capital for the Fintech sector working with a dedicated focus to empower country’s Micro and Small businesses and operating as extended arms of large banks and financial institutions.”
Lunia adds, “Government should also push the collaborative approach decided by the Reserve Bank to incentivise the banking sector to partner with fintech lenders on various risk sharing co-lending models to extend capital support to MSMEs leveraging Fintech’s well established widespread origination, underwriting and seamless delivery capabilities.”
Tax support, incentives and access to credit are some demands of digital lenders to reach out to the underbanked segment across consumer and small businesses.
Ram Kewalramani, Co-founder and Managing Director at CredAble says, “After a cataclysmic 2020, India looks forward to innovative and robust support from the Govt of India in form of various incentives, tax cuts, subsidies, access to credit to essentially battle and cope with the cascade effect of the brutal pandemic, which many are still reeling under. When it came to public knowledge that this year Budget will be paperless and presented digitally, the words of FM “This will be unlike anything in the past 100 years” truly raised expectations.”
Ram adds, “Liquidity is a lifeline in tough times like these and more so in 2021. Thus it is expected that budget 2021 will enable and incentivize NBFCs, startups in the space of lending especially in the areas of working capital financing, as well as tech and non-tech financial institutions structurally because this ultimately turns the economic wheels largely.”
Sashank Rishyasringa, Co-Founder & MD at Capital Float expects the digital proliferation happening since the lockdown to continue going forward and move a lot of offline processes to online channels.
He adds, “The economy is slowly recovering from the pandemic and businesses are on a revival mode. The common man is expecting some relief from the budget such as ease of doing business, decreased interest rates on loans from banks and creating jobs for the growing aspirational middle class. The income and employment generated by millions of SMEs form the backbone of the Indian economy with a multitude of small, local entrepreneurs hoping for relief measures from a credit lending lens.”
Sashank says, “Proliferation of digital adoption by businesses & consumers has only been accelerated by the lockdown. Policies like putting businesses in lower income tax brackets on the back of higher volumes of digital transactions would also be a welcome change. I am extremely hopeful for an announcement favourable to the start-up/fintech sector after FM Nirmala Sitaraman promised a budget the likes of which India has never seen before.”
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