NBFCs driving financial inclusion and inclusive growth in India: Simranjeet Singh, CEO – SME & Retail Business, Anand Rathi Global Finance


NBFCs have been at the forefront of financial inclusion in India, lending to underserved and uncovered and deepening access to formal credit which has helped in inclusive growth, shares Simranjeet Singh, CEO – SME & Retail Business, Anand Rathi Global Finance in an exclusive interview with Shruti Jain of Elets News Network (ENN).

How do you think the MSME retail market reshaped itself after the pandemic & technological advancement?

Frankly speaking, the MSMEs in India are one of the largest drivers of the economy, contributing around 29 per cent to the overall GDP, employing over 11 crore people in its 6.3 crore enterprises. However, hit by the COVID-19 and its aftermath, the MSME sector almost crash-landed in 2020, facing a strong contraction in revenue. The sector suffered the most in ensuring business continuity, challenged by severe liquidity crunch and dipping demand.

With that said, there always is light at the end of the tunnel. With the COVID-19 numbers dwindling and respite from the government with supportive programmes such as repo-rate reduction, emergency credit line guarantee scheme & pent-up demand, things are finally looking positive for the MSME sector. Economic survey 2022-23 shows that Goods and Services Tax paid by Micro, Small & Medium Enterprises increased to Rs. 5.5 lakh crore in FY22 from Rs. 5 lakh crore in FY20, which even came down to about Rs. 4.7 lakh crore in FY21.

One of the key initiatives that has been adopted by the MSMEs to reshape itself after the pandemic is the digitisation of their key processes including reaching out to a larger client base, less need for staff, production efficiency during an economic downturn, ease of facilitating transactions between buyers and sellers etc. since the government has been consciously advancing initiatives to support the growth of MSMEs in India. This has resulted in an improved overall efficiency in the sector which has helped it grow at a very fast pace.

Additionally, after the pandemic, the other areas in which MSMEs have strengthened themselves are being extra cost conscious by managing & curtailing their overheads for example compressing the debtor days by either being on advance payment terms or having 30 debtor days at best.

The role of NBFCs in financial inclusion has increased over time. How is your organization contributing to developing India’s infrastructure & GDP growth pace rate?

NBFCs have been at the forefront of financial inclusion in India, lending to underserved and uncovered and deepening access to formal credit has helped in inclusive growth. We at Anand Rathi Global Finance Limited (ARGFL) take pride in being one such institution that is at the forefront of providing quick and easy access to credit to MSMEs as well as the Real-Estate sector which are the two pillars of the economic growth of a country. The easy availability of credit will enable these enterprises to grow in their line of business which will lead to the overall growth of the economy.

What do you think about Core Financial Services Solutions (CFSS) for NBFCs? How will it create seamless service & digital offerings for customers?

Core Financial Services Solutions (CFSS) is akin to Core Banking Solutions (CBS) adopted by Banks. Considering the success of the CBS, the RBI aims to replicate the same in NBFCs via CFSS. To my mind, this is a very useful initiative for all parties including the customers, the regulatory body as well as the NBFCs.

With a digital front-end, CFSS will allow customers to enjoy a hassle-free user interface which will ease the process by transacting digitally. This will result in an improved customer relationship for the NBFCs much like the banks. Also, automating processes makes it difficult for any human-made error or fraud, which increases the transparency of the process and gains credibility in the eyes of the customers and the authorities as well.

As a leader, what strategies and preparatory measures should be taken into account given the unpredictability and volatility that emerges due to instability in the world order?

Volatility and unpredictability have become the new permanent. With increasing uncertainty by the day, we at ARGFL ensure that we are always one-step ahead with adequate advanced planning. Some of the key strategies adopted by us include enhanced governance through a proactive, robust and agile risk management model, implementing technology for improved efficiency and enhanced experience and having a crystal clear customer segmentation and offering to ensure we cater to the right clients.

What are your plans for the future to deliver diversified financial products & innovative services to stay relevant in the market?

At Anand Rathi Global Finance, one of the key focus areas for us going forward is technology advancement at each critical junctures of our customer’s journey to improve their overall experience as well as better the service delivery time. Along with the digitisation, we look forward to deepen the reach with increased manpower in our existing locations as well as venture into newer geographies to service clients with newer product segments and product lines.

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