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Banks go Back to Drawing Board for MSME Funding
October 24, 2017
Expecting the transition to the Goods and Services Tax (GST) to increase the borrowing capacity and improve the credit ratings of the Micro, Small, and Medium Enterprises (MSMEs) in the country, the banks are reworking their strategies for funding the industry.
Some of the key elements of the new strategies include helping the MSMEs in improving their cash flow prediction models and with GST compliance, launching new products for them, etc.
IndusInd Bank CEO, Romesh Sobti said that MSMEs used to disclose only about 60% of their total revenue. However, under the GST regime, they are forced to disclose 100%. This means their balance sheet will now become stronger and their borrowing capacity higher.
