MSMEs must leverage modern tech and innovate, to survive & thrive: Harish Gupta, Head-IT, CGTMSE

Harish Gupta

The MSME sector has been often considered as a key growth engine to the Indian economy, however, the sector went through a lot of challenges post the Covid outbreak and technology advent seems to be a significant respite, ensuring revival. Experts from around the industry, has been naming Cloud, in particular, as one of the gamechangers, that can help ensure revival for the MSME industry. In this regard, Rashi Aditi Ghosh of Elets News Network (ENN) interacted with Harish Gupta, Head-IT, Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

During the exclusive conversation, Gupta said, “Cloud has enabled organizations of all sizes, including MSMEs, with access to modern, next-generation technologies.”

Excerpts from the conversation:

1. What’s the mission of CGTMSE?

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was set up by the Government of India and Small Industries Development Bank of India (SIDBI) to help first-generation entrepreneurs realize their dream of setting up their own small businesses. Our focus is to continue to make bank credit more and more easily accessible / available to them, sans the hassle of collaterals / third party guarantees. This is in line with the objectives of the Credit Guarantee Scheme (CGS) launched by the Ministry of Micro, Small & Medium Enterprises (MSME), Government of India – with the objective to strengthen the overall credit delivery system and facilitate easy, timely flow of credit to the MSE sector.

Also Read: Technology models easing SME loan processing with banks

2. How are BFSI organizations helping the growth of Indian MSME industry?

For any MSME to survive and thrive, uninterrupted and easy access to adequate capital is essential – be it to leverage modern technologies and innovate faster, hire quality talent and create world-class products and services, or to get their sales, marketing, delivery strategies right. We are also seeing more and more MSMEs investing adequately in improving customer experience. These MSMEs are turning to BFSI organizations to support their business aspirations and growth journey.

At CGTMSE, we are helping young entrepreneurs get access to credit facility up to Rs 2 crore without any collaterals / third party guarantees. Our aim is to help more and more young leaders to make the leap from being from job seekers to job creators / providers. This will go a long way in helping develop a new India in the new decade.

3. How are cloud and emerging technologies reshaping the dynamics of lending / capital access management?

Cloud has enabled organizations of all sizes, including MSMEs, with access to modern, next-generation technologies. Today, an MSME can use the very same technology that a large enterprise (with vast resources) uses, and expand their innovation ambit or accelerate market outreach. On the lending side as well, cloud and modern technologies have helped increase the pace of lending and disbursement, improved process efficiencies. Processes like credit checks, customer lifecycle management and recovery are now far more simple and quick, making the whole lifecycle transparent and predictable with advanced analytics and AI/ML, also preempting frauds. This is in turn is helping MSMEs gain faster access to capital and introduce new products/services quickly to the market.

4. Would you like to tell us about your partnership with Oracle? How is CGTMSE benefited by the collaboration and cloud-led innovation?

Oracle has a proven track record of securely managing the bulk of the world’s critical business data for over four decades. Several large BFSI organizations already use Oracle technologies. That’s why we selected Oracle’s secure, next-generation cloud infrastructure (OCI). Hands-on support from the Oracle Technology Cloud Engineering team and the Path Infotech team (implementation partner) has made our cloud journey fast and smooth. Using OCI, we have gained auto-scalability and autonomous data management capabilities. We are able to smoothly manage our peak loads. OCI’s security-first design architecture has helped us strengthen our overall security posture as well.

Also Read: How technology can help startups, businesses & SMEs choose right group health & commercial insurance

We now have high availability of our application. It is more robust, allowing us to focus more on our core business and new IT initiatives, while also helping us save significant costs, as we now have an OPEX model for IT. Most importantly, using OCI, we are able to innovate faster and better, in 50 percent less time than earlier. Buoyed by 100 percent uptime irrespective of peak loads or increased concurrency, we have seen a 25 percent improvement in transaction cycle times. Last but not the least, we have benefited from an upfront cost savings to the tune of 30-40 percent compared to our previous on-premises IT setup.

5. With CGTMSE’s move to the cloud, how will your customers benefit / be impacted?

Our customers are experiencing the change in performance and uptime / availability. Like I mentioned, 25 percent improvement in transaction cycle time is something significant, which has in turn improved the turnaround time of our business processes. Because of this performance improvement, we are seeing approximately 40 percent higher (y-o-y basis) business flow this year.

One of our automation initiatives “Minimum data entry program” will allow our customers to connect with us seamlessly using our APIs – irrespective of the volume of transactions – anytime and avail the credit guarantee. These initiatives have helped banks to disburse the credit facility to borrower more quickly.

Our MSEs facing portal UDAAN which has slogan “उड़ने की आशा” / “Let Your Dreams Fly High”, is a digital platform for Micro and Small Enterprises (MSEs) looking forward to applying for collateral free loans wherein the portal gives Provisional Guarantee Certificate to avail collateral free loans from their preferred Banks / Non-Banking Financial Companies (NBFCs). The portal’s main objective is to provide impetus to credit in financial ecosystem of India.

The ‘UDAAN’ ( portal has already onboarded 35 MLIs (Member lending institutes) who are part of this milestone portal. With such an exhaustive list of public sector banks, private sector banks and NBFCs, applicants have varied options to avail credit backed by CGTMSE’s guarantee. Being a digital journey, there is a seamless flow of data to MLI selected by applicant without any physical intervention. In the journey, a borrower logins, submits their consent-based details and based on their eligibility, a Provisional Guarantee Certificate is issued, and the application is transferred to the MLIs selected by applicant. MLI may thereafter carry out their due-diligence process for final decision on sanction and disbursement of loans. UDAAN portal has seen a very good traction, with several young entrepreneurs and MSE borrowers availing the benefits.

6. What is CGTMSE’s innovation roadmap and growth plans for the next 12 months?

We leverage technology across the board, and a number of tech modernization programs are underway.

The customer onboarding and servicing part of transaction journey is completely digital. We are revamping our core business application Guarantee Management System (GMS) which will be on a micro-service-based architecture and will encompass a mobility solution, a BI solution, and API based integrations with CBS, This program we will be fully backed-up by OCI cloud and its services.

Also Read: The decade of SMEtech is going to transform the business landscape for India

We are adopting micro services-based application architectures to consolidate all our core business applications. We are in the process of fully automating our processes of receivables and payables with host-to-host API Integration with our core banks. We are also exploring a solution for management of API services.

Business Intelligence and Mobility are key focus areas for the next few months. One of our key data management goals is to achieve reduction in manual data entry by at least 50 percent this year, so we facilitate API based integrations for hassle free data exchange with banks and other agencies.

In the near term, we are planning to move traditional accounting and HR systems to SaaS – i.e. subscribe to a cloud based ERP solution. We have also initiated the process of moving our monolithic application architecture onto a more modern, container-based micro-services architecture.

In summary, we will continue to make it easier for customers to transact quickly and easily with us using digital channels.

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