Lending based on GST information improves MSME access to credit

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Digital lending based on GST data can enable near the credit gap of around $250 billion for SMEs and furnish finance at shorter rates to reduce their borrowing costs, according to Vayana Network, a supply chain financing platform. In this article we will discuss on GST information improves MSME.

GST information improves MSME

Vayana Network has been eligible to lower the cost of financing for MSMEs on its program by 200-600 basis points by partnering with banks and NBFCs which are staring at supply chain financing to create their MSME portfolios.

Founder and CEO, Vayana Network, explained MSMEs have been underserved by the formal banking procedure due to a trust deficit arising from the absence of credible data about them and the prohibitive expense of servicing huge numbers of small MSMEs. Vayana lectures the trust deficit by using credible alternative data like GST and real-time trade data analytics to stimulate credit to MSMEs.

The minor of MSMEs are being combined into bigger SCF programmes run by the formal banking system, exempting them from the clutches of the high-cost informal market, he confided.

Officials asserted the financing costs on their network are shorter by 200 to 400 basis points for SMEs and up to 600 basis points in case of last-mile retail financing. The company will be targeting $10 billion in incremental disbursement in 2022, and he expects the throughput to grow exponentially and second on the platform every year.

Further Notification by MSME

Vayana and CRIF Solutions, a provider of value information, analytics, scoring and judgment solutions, recently launched a tech-based tool for assessment of MSMEs. The Good Business Score is varied on ongoing GST data. Chief risk officer, Vayana Network, said a good score will enable MSMEs enhance their bargaining power as the score was based on GST Return filings, which are an authenticated and credible piece of data.

The product has developed interest from MSMEs, corporates, B2B supply chains and lenders, and the business anticipates to assess and score over 10,000 SMEs over the next quarter. Two public sector banks, two NBFCs and three corporates have already reached out to the company use the equipment to assess their supply chain partners and customers.

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If you want any other guidance related to GST Registration or GST Return filing, please feel free to talk to our business advisors at 8881-069-069.

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