New Delhi– The Reserve Bank of India (RBI) is preparing a framework to provide accreditation to credit counsellors for facilitating easy flow of credit to the MSMEs (Micro, Small and Medium Enterprises), its Deputy Governor S.S. Mundra said here on Tuesday.

“For bridging the information asymmetry on the MSME borrowers side, RBI is initiating a process for putting in place a framework for accreditation of credit counsellors who are expected to serve as facilitators and enablers for micro and small entrepreneurs,” Mundra said at the 2nd national conference on MSME funding organised by the Confederation of Indian Industry (CII).

“Since MSMEs are typically enterprises with little credit histories and with inadequate expertise in preparing financial statements, credit counsellors will assist the borrowers in preparing their project reports and also help banks make better informed credit decisions,” he added.

Mundra said that RBI is also in the process of issuing final guidelines on P2P (peer to peer) lending in the MSME sector.

“New players have entered the MSME lending landscape in form of P2P companies. RBI has been mindful of a need to regulate these entities without stifling their ability to innovate and is currently in the process of issuing final guidelines on P2P lending,” he said.

“These entities use an online platform to match lenders with borrowers to provide unsecured loans and mostly for receivables financing,” he said.

Mundra said that P2P lending has great potential as an alternative form of low-cost finance as it can reach to the needy where formal sources are unable to reach or unwilling to lend.

In order to solve the problem of delayed payment to MSMEs, RBI has licensed three entities for operating the Trade Receivables Discounting System (TReDS).

“The system (TreDS) would facilitate the financing of trade receivables of MSME enterprises from corporate and other buyers, including government departments and public sector undertakings (PSUs) through multiple financiers,” he said.

The objective is to create Electronic Bill Factoring Exchanges which could electronically accept and settle bills so that MSMEs could encash their receivables without delay, he added.

It is expected that the TReDS will commence operations within this current fiscal.

“It would be important that the use of TReDS is made mandatory for, to begin with corporate and PSUs and later for the government departments,” Mundra said.


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