SIDBI Launches SME Service Platform To Boost Digitisation, Credit Access

The Small Industries Development Bank of India (SIDBI) is launching an SME service platform to facilitate the digitisation of small businesses and make access to credit easier for those caught in a cash crunch owing to the Covid-19 pandemic. The platform would also include several features to help micro, small and medium enterprises (MSMEs) resume their operations remotely.

For instance, the SME service platform will also include a list of tools for automated accounting, tax reconciliation, cloud services, cybersecurity, video conferencing, online meetings, and more. The tools will be available free of charge for a limited period for MSMEs that are in partnership with fintech companies, industry bodies, and corporates.

Moreover, SIDBI has clarified that non-banking financial companies (NBFCs), and digital lending startups could leverage its eKYC services for paperless onboarding of new customers. Moreover, the platform will also focus on scaling up the adoption of e-signatures in regular contracting, credit processing, and other documents.

“Financial institutions could consider a combination of eKYC and deferment of physical verification to scale up remote onboarding. Turnaround time on loan decision-ing is expected to be significantly reduced,” it added

SIDBI has also highlighted that it will offer an “artificial intelligence-driven risk modelling and scenario planning for financial institutions.” Moreover, it will work on de-risking the supply chain and introduce a blockchain-enabled inventory management system to ensure undisrupted support.

The SME service platform will allow businesses with available warehouses to list them for inventory management and provide logistic support for sectors like pharmaceutical and FMCG as they have seen an exponential rise in demand.·

SMEs Swim Against The Covid-19 Tide

The MSMEs account for 45% of the country’s industrial output and 40% of its exports. The same report by the ministry of micro, small and medium enterprises, there are 48.8 Mn MSMEs in India, which employ 111 Mn people. With Covid-19, the segment has been hit hard with cash flow all but stopping, therefore the SIDBI decided to help the platforms get access to digital services, along with other offerings to facilitate that digitisation.

The SME platform will educate, improve access and monitor all Covid-19 related initiatives taken for the improvement of the smaller enterprises. Mohammad Mustafa, IAS, chairman and managing director of SIDBI, highlighted that the platform will have all MSMEs, stakeholders of the segment, financiers, corporates, government, regulators, employees and associations.

It will allow MSMEs to look up information on financing opportunities, getting credit enhancement, scaling their company, and getting support services like advisory, network access, video calls/digital tools, and more.

Meanwhile, financiers will get access to a marketplace, documentation support and loan management through SME service platform. Corporate entities can get in-depth market information, supply chain solutions, and collaboration opportunities, whereas the Industry associations can avail more insights and analytics, partnerships.

The SME service platform will also come in handy for the government, who can monitor the policies, schemes, and programmes introduced by them for smaller businesses. It also allows the government departments to keep a track of tax measures, and meet sourcing requirements through procurements. Other regulators can tap macro-economic trends, compliances, risk management, and systemic aspects through the platform.

It is also open to employees looking to skill or upskill, relocate, or for any sort of grievance redressal.