<p><em>Rajesh Sharma, Managing Director, Capri Global Capital </em></p>.<p>"The concept of pledging gold for emergency funds has been around for centuries and widely popular in rural markets as an effective tool to avail short-term credit. Gold loan focused NBFCS have been fulfilling the credit demand of under-penetrated markets with typically small ticket sizes ranging between INR 50,000 to INR 1 lac. Offering Priority Sector Lending status to the gold loan in the upcoming budget will pave the way for the banks to participate with more potency and fund gold loan NBFCs at a subsidized rate. The lower cost of funds will ultimately benefit the borrowers with lower borrowing costs. It will aid in greater institutionalization of gold collateralized credit.</p>.<p>Despite having limited resources and lesser opportunities, women entrepreneurs from rural areas have shown immense potential to add value to the Indian economy by entering the MSME sector. The finance scheme targeted towards women MSME entrepreneurs like PMAY, for ticket sizes above INR 1 million, will encourage inclusivity and accelerate their entrepreneurial journey.</p>.<p>Currently, MUDRA refinance is available only up to INR 1 million, the government could look to increasing the limit and give broad contours for eligibility – age, ticket size, end-use, cost of funds to intermediating NBFC, spreads etc. The policymakers could set guidelines for the intermediating NBFCs to define underwriting criteria such as classification norms for secured and unsecured loans, disbursement timeline, documentation requirement and loan amount. This will boost the fiscal growth of entrepreneurs in the micro category between INR 1 to 5 million.</p>.<p>Additionally, Budget 2021-22 lowered the minimum loan size eligible for debt recovery under SARFAESI from INR 5 million ticket to INR 2 million. However, the same is available to HFCs for lower ticket sizes. This ceiling should be amended to bring smaller ticket NBFC loans under the SARFAESI ambit. The ceiling could be lowered further to INR 1 million or below."<br /> </p>
<p><em>Rajesh Sharma, Managing Director, Capri Global Capital </em></p>.<p>"The concept of pledging gold for emergency funds has been around for centuries and widely popular in rural markets as an effective tool to avail short-term credit. Gold loan focused NBFCS have been fulfilling the credit demand of under-penetrated markets with typically small ticket sizes ranging between INR 50,000 to INR 1 lac. Offering Priority Sector Lending status to the gold loan in the upcoming budget will pave the way for the banks to participate with more potency and fund gold loan NBFCs at a subsidized rate. The lower cost of funds will ultimately benefit the borrowers with lower borrowing costs. It will aid in greater institutionalization of gold collateralized credit.</p>.<p>Despite having limited resources and lesser opportunities, women entrepreneurs from rural areas have shown immense potential to add value to the Indian economy by entering the MSME sector. The finance scheme targeted towards women MSME entrepreneurs like PMAY, for ticket sizes above INR 1 million, will encourage inclusivity and accelerate their entrepreneurial journey.</p>.<p>Currently, MUDRA refinance is available only up to INR 1 million, the government could look to increasing the limit and give broad contours for eligibility – age, ticket size, end-use, cost of funds to intermediating NBFC, spreads etc. The policymakers could set guidelines for the intermediating NBFCs to define underwriting criteria such as classification norms for secured and unsecured loans, disbursement timeline, documentation requirement and loan amount. This will boost the fiscal growth of entrepreneurs in the micro category between INR 1 to 5 million.</p>.<p>Additionally, Budget 2021-22 lowered the minimum loan size eligible for debt recovery under SARFAESI from INR 5 million ticket to INR 2 million. However, the same is available to HFCs for lower ticket sizes. This ceiling should be amended to bring smaller ticket NBFC loans under the SARFAESI ambit. The ceiling could be lowered further to INR 1 million or below."<br /> </p>