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India's Huge Lending Opportunity
Feb 27, 2020

The low access to credit for micro medium and small enterprises (MSMEs) tells us there is a huge opportunity for lenders.

Of the 60 million MSMEs in India, only 11% had access to credit from organised lenders. Most of them are self-financed or get credit from unorganised sources.

Self-financing limits the growth of these MSMEs. On the other hand, high interest rates from unorganised sources makes it difficult for them to earn profits.

The Modi government is looking at various ways to correct this problem. Mudra loans, online loans facilities are being made available to MSMEs.

Slowly but surely, lenders are sensing the huge opportunity that lies ahead for this sector.

Banks and other financial firms with prudent lending practices and strong distribution networks will benefit from this megatrend.

Data source: Ujjivan small finance Bank RHP

This Chart Of The Day was published in The 5 Minute WrapUp - This Megatrend Can Help You Find the Next Bajaj Finance

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1 Responses to "India's Huge Lending Opportunity"


Apr 1, 2020

Thank god. they are not taking loans. It is simply unviable for these MSME to take loan and run the business. There is no scope for increasing the business size because of slow growth in purchasing power and these MSME are running on a low number of employees. Replicating the same efficiency over increased volume simply not possible.

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