15th Annual Banking Summit “Structural Reforms in MSME Funding”

Friday, March 06, 2020

Mumbai, March 6, 2020
: The ASSOCHAM National Council for Banking has taken the initiative of organizing the 15th Annual Banking Summit at Hotel Taj Mahal Palace, Colaba, Mumbai. The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has been conducting the Annual Banking Summit with the objective of bringing together various stakeholders to deliberate new opportunities and radical ways. These discussions help in creating an enabling environment which encompasses new approaches and innovations carried out by the financial industries. This year they have planned the Summit on the theme ‘Structural Reforms in MSME Funding’.
 
The size of the Indian economy is currently around $2.8 trillion. This means the Indian economy needs to almost double in size in the next 5 years to realise the target of reaching the $5 trillion mark. Achieving the vision of becoming a $5 trillion economy requires India to focus on innovations and governance structures in the banking system. With financial services contributing ~7% to the Indian GDP, a strengthened banking sector has the potential to contribute directly and indirectly to GDP, increase job creation and enhance median income. FinTech has also seen huge developments in the past few years, impacting varied industries and the common people in multiple ways.
 
Reserve Bank of India (RBI) Governor Shaktikanta Das, who was the chief guest at the ASSOCHAM event, said, “The challenges in the MSME sector is confined to infrastructure bottlenecks, absence of formalisation, some inertia to technology adoption, capacity building, backward and forward leakages, lack of access to credit and risk capital and perennial problem of delayed payments by large corporates, which naturally effects the business cycle of the MSMEs. Players in the MSME sector need to do quite a bit with regard to improving their competitiveness by adopting new technologies, accepting e-payments, and try and foster inhouse innovation and inhouse product quality improvement. They should also I feel try and expand in size and reduce the dependence on the incentives structure.”

Niranjan Hiranandani, President, ASSOCHAM said, “The time is right for Indian Banking system to be resurrected out of its Cancer ailment. The economic data is flashing warning signs and pressing alarming bells to rejig and redesign sickening banking structure. The overhanging distressed loans need a cleaning spree with the fresh fiscal stimulus to pump in desired liquidity and relive the choked banking sector. Fresh borrowing and lending to the priority and labour intensive sector is crucial to recoup financial growth.”

Another sector that will play a key role in achieving the target of $5 trillion economy is the MSME sector. MSME sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. MSMEs not only play a crucial role in providing large employment opportunities at comparatively lower capital cost than large industries, but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth. MSMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country. Hence, there is a need to ensure funding for MSME sector. There is a need to create an enabling environment and supporting infrastructure for improving access to financing and credit cycles. All components of the infrastructure, such as the MSMEs, Banks, NBFCs, MUDRA Bank, Credit Rating Agencies, FinTechs, etc. need to work in tandem, so that the required funding is done to all the sectors with ease.  
 
 
About ASSOCHAM:
ASSOCHAM initiated its endeavour of value creation for Indian industry in 1920. It was established by promoter Chambers, representing all regions of India. Having in its fold over 400 Chambers and Trade Associations, and serving over 4.5 lakh members across India. ASSOCHAM has emerged as the fountainhead of Knowledge for Indian industry, which is all set to redefine the dynamics of growth and development in the Knowledge Based Economy. More information available on www.assocham.org
 
For further details, please contact:
 
Manju Negi            
AVDHESH SHARMA  
ASSOCHAM            
ASSOCHAM
#+919810910911
#+918527639419
 
 
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