Parl Panel: Link Udyam portal with CIBIL, UPI-like platform, credit card for MSMEs

New Delhi, April 18 (KNN) The Parliamentary Standing Committee on finance has suggested developing the Udyam portal into a one-stop central data repository for the micro, small and medium enterprises (MSME) sector by linking it with other databases such as CIBIL data, utility bills data, etc. 

The portal is currently linked with the Government e-Marketplace (GeM), Income Tax, GST and Trade Receivables Discounting System (TReDS) portals. 

However, “The Committee still feel that whatever data is there with regard to the MSME sector, they exist in a fragmented manner and there is no real integration across multiple datasets. Such a database could then be accessed by lenders, after getting the MSME borrower’s consent, to extend timely credit to them,” said a report tabled by the Committee in Lok Sabha on strengthening credit flow to the MSME sector.

Minister Nirmala Sitharaman had also announced linking the Udyam portal with e-Shram, National Career Service (NCS) and Atma Nirbhar Skilled Employee-Employer Mapping (ASEEM) in the budget to enhance skilling and recruitment for MSMEs.

The Committee also pitched for creating a ‘UPI for MSME Lending’ for all MSMEs in the formal sector to access small-ticket working capital loans in a mobile-based, contactless, paperless, and low-cost way. 

To enable this digital vision of MSME credit to come to life, the committee believes that information needs to be used to replace physical collateral that is cash flow lending or flow-based lending, the report noted.

While lenders may not be comfortable giving large ticket loans to MSMEs over a five or 10-year period without collateral, unsecured small-ticket loans over a 60 or 90-day period can be profitable for lenders as the transaction cost under the cash flow-based approach can be brought down enough, the Parliamentary Panel said. (KNN Bureau)