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<ul><li><keyword id="6553953" type="UNKNOWN" weightage="20" keywordseo="creditbee">CreditBee</keyword> is reportedly <keyword id="874458" type="LOCATION" weightage="100" keywordseo="Xiaomi">Xiaomi</keyword>’s new <keyword id="3088449" type="PERSON" weightage="20" keywordseo="micro-lending">micro lending</keyword> platform in India. </li><li>Experts expect India’s <keyword id="2461546" type="PERSON" weightage="20" keywordseo="FinTech">fintech</keyword> industry to double in the next two years.</li><li>The service will issue <keyword id="1628688" type="PERSON" weightage="20" keywordseo="micro-loans">micro loans</keyword> at a 3% rate of interest for a period of 90 days. </li></ul>Chinese smartphone maker Xiaomi is launching their new lending platform in India. The micro-lending product is named CreditBee since the service has been launched in partnership with <keyword id="3538270" type="PERSON" weightage="20" keywordseo="KrazyBee">KrazyBee</keyword>. The company has yet to make an official announcement, but a source speaking to <a href="https://tech.economictimes.indiatimes.com/news/internet/xiaomi-launches-its-first-lending-product-in-india/64282329">ETtech</a> claimed that the platform is already live and the company will officially unveil it in the coming weeks. Microloans are essentially loans of small value issued at a low rate of interest. Over the past couple of years, it’s become quite an attractive <a href="https://www.moneycontrol.com/news/business/personal-finance/7-emerging-lending-options-you-should-explore-to-raise-funds-2566149.html">alternative</a> for under-represented groups or start-ups, who don’t necessarily require a huge loan. On CreditBee, consumers will be able to avail loans <a href="https://inc42.com/buzz/xiaomi-launches-lending-product-creditbee-with-krazybee/">starting</a> from ₹1,000 to ₹100,000. The term of the loans is 90 days, at an interest rate of 3 percent. Their target audience is salaried professionals who need short-term, small amount loans. KrazyBee, Xiaomi’s partner for this venture, is amongst the companies Xiaomi invested in. It was only last year that they <a href="https://tech.economictimes.indiatimes.com/news/startups/krazybee-raises-8-million-from-xiaomi-tech-and-others/61111187">led</a> an $8 million round for the company, which is based out of Bengaluru. And now, Xiaomi may even be <a href="https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/xiaomi-is-in-advanced-talks-to-pick-up-stake-in-zestmoney/articleshow/63675367.cms">looking</a> into making a second investment in the fintech industry with <keyword id="6414960" type="UNKNOWN" weightage="20" keywordseo="ZestMoney">ZestMoney</keyword>. ZestMoney is the company that fuels EMI-loans on Mi.com at the moment. Reports <a href="https://tech.economictimes.indiatimes.com/news/mobile/xiaomi-is-in-advanced-talks-to-pick-up-stake-in-zestmoney/63675487">indicate</a> that the former is looking to raise around $20 million through Xiaomi and its existing investors, like PayU. It’s not surprising that Xiaomi is looking at the fintech industry. The company already has a few lending platforms back home in China. Also, it had <a href="https://www.techradar.com/news/xiaomi-plans-to-launch-6-new-smartphones-expand-its-non-smartphone-portfolio-in-2018">indicated</a> earlier that it would like to expand its business beyond the smartphone arena and build a non-smartphone portfolio. With the country’s demographic dividend hitting its peak, more and more products are being targeted towards salaried individuals. Experts <a href="https://www.financialexpress.com/economy/economic-boom-in-india-coming-soon-massive-number-of-consumers-eligible-for-credit-heres-what-it-means/1175548/">speculate</a> that there are nearly 150 million consumers who aren’t 'credit active' right now but are eligible to turn into retail credit borrowers. Their analysis suggests that tapping into that potential could result in big growth opportunities for companies in the lending industry, which in turn will provide a boost to the economy. That being said, India has <a href="https://www.foxbusiness.com/markets/the-10-countries-where-people-save-the-most-money">historically</a> been a savings oriented nation, though that trend has been slowly been <a href="http://www.ey.com/Publication/vwLUAssets/ey-the-battle-for-the-indian-consumer/$File/ey-the-battle-for-the-indian-consumer.pdf">reversing</a> since the dawn of liberalisation and privatisation in 1992. With the fintech software market set to <a href="http://www.nasscom.in/knowledge-center/publications/fintech-india-global-growth-story">double</a> to $2.4 billion by 2020 from the current $1.2 billion, the transformation will only gain momentum. Currently, India is the biggest market for Xiaomi, second only to China. The company’s Indian operations even <a href="https://economictimes.indiatimes.com/tech/hardware/xiaomi-turns-profitable-in-third-year-in-india/articleshow/61954734.cms">started</a> turning a profit in FY 2017, which marked Xiaomi’s third year in the country with sales of around ₹8,379 crore.

After conquering the smartphone space, Xiaomi now wants to enter India’s fintech industry

Mumbai, May 7 () Micro enterprises, with borrowings of less than Rs 1 crore, are best placed to help the economy come out of the COVID-19 crisis, Small Industries Development Bank of India (Sidbi) and TransUnion CIBIL said on Thursday. In a joint report, the two entities said leverage ratios and non-performing assets (NPAs) of micro enterprises are the lowest in the commercial segment. They also did an impact analysis on the sector's response to two of the biggest business shocks in recent times -- drying up of NBFC credit following the IL&amp;FS crisis, and GST implementation. As per the report, micro enterprises have been classified as those with borrowings of less than Rs 1 crore. The economy has been severely impacted due to the COVID-19 pandemic but the government and policymakers are looking for segments that are in the best position to help revive the economic activity the quickest. "The micro segment can be the next growth driver for the economy and credit institutions must capitalise on this opportunity by identifying the micro segment entities that have stood strong through the past disruptions and fund them during these times," Sidbi Chairman and Managing Director Mohammad Mustafa said. From the NPA perspective, bad loans in the very small (under Rs 10 lakh exposure) segment stood at 11.3 per cent as of December 2019, as compared to stress of 17.3 per cent in the overall commercial lending segment, 18.7 per cent for the medium corporate segment and 19.1 per cent for the large corporate segment. In the report, both the entities analysed the response from a loan delinquency perspective after both the GST implementation and the drying up of financing by the non-bank lenders following the IL&amp;FS crisis to show that the NPA accretion by micro enterprises was low. In January 2020, 63 per cent of the active MSMEs (micro, small and medium enterprises) were in the structurally strong risk segment having a CIBIL MSME Rank (CMR) between 1 and 5, while 37 per cent MSMEs are in CMR 6 to 10, the report said, speaking of the current liquidity and leverage positions of the small businesses. "Structurally strong MSMEs are better positioned to survive the current pandemic situation and emerge stable. These MSMEs are the most eligible to receive financial assistance from credit institutions," Cibil Managing Director and Chief Executive Officer Rajesh Kumar said. In 2019, the micro segment received a total credit support of over Rs 92,000 crore from banks and other lenders, with businesses in Maharashtra getting the highest share of the loans, while the loan growth in Rajasthan was the fastest. It said the state-run lenders, which had ceded some share in the MSME lending, have gained market share in 2019, adding that public sector banks now account for 49 per cent of the MSME lending and over 59 per cent of the lending to the micro enterprises. The overall lending to commercial enterprises of all sizes increased by a tepid 3.9 per cent at Rs 64.04 lakh crore, it said. AA HRS

Micro enterprises best placed to help economy come out of COVID-19 crisis: Report

<ul><li><keyword id="2181438" type="PERSON" weightage="20" keywordseo="Aye-Finance">Aye Finance</keyword>, the lending startup for micro, small and medium enterprises, has roped in former <keyword id="1391131" type="COMPANY" weightage="20" keywordseo="Hero-FinCorp">Hero Fincorp</keyword> Chief Business Officer <keyword id="252940" type="PERSON" weightage="20" keywordseo="Samir-Mehta">Samir Mehta</keyword> as its deputy CEO. </li><li>Mehta will focus on scaling up Aye’s business and will implement strategies to enhance the MSME lenders’ performance and capability.</li><li>Recently, in June, Aye Finance had raised ₹210 crore from CapitalG – Google’s parent company Alphabet’s growth fund. </li></ul>Aye Finance, the lending startup for micro, small and medium enterprises, has roped in former Hero Fincorp Chief Business Officer Samir Mehta as its deputy CEO. Mehta comes with 22-year experience in BFSI, and at Aye Finance, he will focus on scaling up Aye’s business and will implement strategies to enhance the MSME lenders’ performance and capability. “Aye provides much-needed financial services to India’s micro-scale informal businesses and the entrepreneurs who run them – a critical, but often overlooked and underserved population,” Mehta said about joining the startup. “He adds further strength to our team, as we successfully negotiate the times of this economic disruption. Samir’s expertise in P&amp;L management of large businesses and in scaling up lending to the SME segment will be very valuable as we emerge from this period,” said Sanjay Sharma, Managing Director of Aye Finance. Recently, in June, Aye Finance had raised ₹210 crore from CapitalG – Google’s parent company Alphabet’s growth fund. The Series E round also saw participation from GT Lightstone, Falcon Edge Capital, A91 Partners, and MAJ Invest. Aye Finance, founded in 2014, has disbursed loans worth ₹3000 crores to over 200,000 businesses in six years. In November last year, the startup had raised ₹125 crores from the Dutch entrepreneurial development bank – FMO. The company also recently ranked 14 in India’s best places to work by Great Place to Work Institute. The six-year-old Aye Finance is getting aggressive on its focus sector – the <keyword id="6393272" type="UNKNOWN" weightage="20" keywordseo="MSMEs">MSMEs</keyword>, given the government push for the growth of India’s small businesses. SEE ALSO: <a href="https://www.businessinsider.in/business/startups/news/masayoshi-son-best-bet-for-future-profit-is-paypay-in-japan-built-on-vijay-shekhar-sharma-paytm-model-in-india/articleshow/77518892.cms">Masayoshi Son’s best bet for future profit is PayPay in Japan⁠ — built on Vijay Shekhar Sharma’s Paytm model in India</a>

Google-backed Aye Finance brings on board former Hero Fincorp Chief Business Officer

Mumbai, May 8 () Non-banking financial companies (NBFCs) on Friday requested the government to provide sovereign guarantee to banks for their additional exposure to the sector. The guarantee from the government will make banks more comfortable and confident to lend to NBFCs that have been facing liquidity issues, the Finance Industry Development Council (FIDC), a representative body of assets and loan financing NBFCs, said. In a letter addressed to Union MSME Minister Nitin Gadkari, the FIDC has also requested for setting up a refinance mechanism, credit guarantee scheme for the micro, small and medium enterprises (MSMEs) and on-lending for priority sector assets. "The government may provide sovereign guarantee to banks for their additional exposure on NBFCs, as long as it is lent to the deserving segments comprising MSMEs/farmers," the letter said. This guarantee, the FIDC said, should be for both term loans and asset pool purchase and should be valid for four years or the full tenure, whichever is less. "All the new facilities sanctioned by banks may be eligible for the credit guarantee from the government so that there is a widespread utilisation of all the schemes," it said. The guarantee commission may be charged from the respective NBFCs and be recovered by banks and remitted to the government, the FIDC suggested. The industry players have also demanded establishing a refinance mechanism to reduce overdependence on banks for their funding needs. "This will establish a dedicated non-bank channel for NBFCs to avail of long-term finance for on-lending to the under-served sectors of the economy," they said adding that Sidbi can be made as the nodal agency to refinance NBFCs for on-lending to MSMEs. Last month, the Reserve Bank of India (RBI) provided Rs 15,000 crore to the Small Industrial Development Bank of India (Sidbi) for financing MSMEs out of which Rs 6,000 crore is earmarked for providing finance to NBFCs. "Additional capital may be provided to Sidbi so that their ability to finance NBFCS, especially the small and medium NBFCs, is enhanced significantly," the sector requested. Such refinance may be provided for a period of at least 3-5 years so that they can on-lend to MSMEs for purchase of machinery/equipment/vehicles for growth, they said. NBFCs said the credit guarantee fund trust for micro and small enterprises (CGTMSE) scheme can play a vital role in enhancing credit flow to MSMEs but a very few NBFCs have availed this facility. The factors that are affecting NBFCs from utilising the scheme include delay in reimbursement of the guaranteed amount to NBFCs, only 75 per cent of the loss amount is reimbursed and strict guidelines on NBFCs having a high credit rating. The sector has requested to release 60-70 per cent of the claim amount under the CGTMSE to be released on a quarterly or semi-annual basis, and also asked to enhance the rate of reimbursement of loss to at least 90 per cent. NBFCs said the RBI has permitted recognition of bank lending to NBFCs for on-lending to MSMEs as priority sector lending (PSL) till December 31, 2020. "We request that this arrangement be made permanent and not time bound and the current limit of 5 per cent of PSL be enhanced to 10 per cent," they said. The industry has also urged to increase the interest subsidy scheme currently being offered to MSMEs on loans taken by them from banks and NBFCs to 3 per cent from 2 per cent. HV MKJ

Provide sovereign guarantee to banks for addl exposure to NBFCs: FIDC

New Delhi, Dec 26 () Aye Finance, the CapitalG-backed fintech lender, on Thursday said it has raised Rs 107 crore as debt funding from Swiss-based BlueOrchard.
 "BlueOrchard has been supporting Aye in its mission to enable the financial inclusion of micro enterprises since May 2017 and has taken a total exposure of Rs 290 crore in the MSME (micro, small and medium enterprises) lender," according to a statement.
 Aye will utilise the latest round of fund to extend affordable and customised credit solutions in the country, it added.
 Last month, Aye Finance had announced it raised Rs 125 crore from Dutch development bank FMO. In the current year, Aye has raised over Rs 1,140 crore in debt and equity from entities including CapitalG, Falcon Edge, HDFC, ICICI and DCB Bank, other than FMO and BlueOrchard.
 Since its inception in 2014, Aye Finance has provided Rs 2,700-crore credit to over 1.96 lakh grassroots businesses, the statement said.
 "This is the sixth round of funds we have received from BlueOrchard, and I believe this demonstrates their comfort with and commitment to our business," Aye Finance Managing Director and founder Sanjay Sharma said.
 Lending to micro enterprises has been a less-travelled path for banks and financial companies and, hence, it is satisfying to have established an innovative paradigm of lending approach, he added.
 Normunds Mizis, chief credit officer at BlueOrchard, said India is an important market for the company, and it has been actively investing here for almost 20 years.
 "We have been working with Aye Finance since 2017. This additional funding is testament to our conviction in the company's mission to bridge the gap between loans offered by MFIs (microfinance institutions) and those available from commercial banks, offering MSMEs across India access to attractive credit solutions," Mizis said. SR HRS

Aye Finance gets Rs 107 cr in debt funding from BlueOrchard

Mumbai, Mar 23 () The Reserve Bank on Monday said bank credit to registered NBFCs towards agriculture, MSEs and housing sector up to prescribed limits will be treated as priority sector loans during the next fiscal starting April. The move will help boost credit disbursement in the targeted segment like agriculture, MSME and housing sector. After undertaking a review, it has been decided to extend the priority sector classification for bank loans to NBFCs for on-lending for 2020-21, RBI said in a statement. Further, it said, the existing loans disbursed under the on-lending model will continue to be classified under Priority Sector till the date of repayment/maturity. "Bank credit to registered NBFCs (other than MFIs) and HFCs for on-lending will be allowed up to an overall limit of five per cent of individual bank's total priority sector lending. Further, banks shall compute the eligible portfolio under on-lending mechanism by averaging across four quarters, to determine adherence to the prescribed cap," it said. As per the revised norms, on-lending by NBFCs for 'term lending' component under agriculture will be allowed up to Rs 10 lakh per borrower. In case of micro and small enterprises (MSEs) the limit will be Rs 20 lakh per borrower. In the housing sector, the limit has been enhanced from Rs 10 lakh to Rs 20 lakh per borrower for classification of the loan as priority sector lending. Under the revised on-lending model, banks can classify only the fresh loans sanctioned by NBFCs out of bank borrowing. However, loans given by housing finance companies under the existing on-lending guidelines will continue to be classified under priority sector by banks. DP NKD DP MRMR

On lending by banks to NBFC, HFCs to be part of priority sector in FY'21: RBI

<ul><li><keyword id="6355222" type="PERSON" weightage="20" keywordseo="piyush-goyal">Piyush Goyal</keyword>, India's interim Finance Minister, is planning to ask the <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> to ease the restrictions it has imposed on 11 public sector banks. </li><li>Goyal met the top management of these 11 public sector banks in Delhi yesterday. </li><li>If he succeeds, micro, small and medium enterprises in India will benefit.</li></ul>Piyush Goyal, who has been given temporary charge of the finance ministry until Arun Jaitley recovers from a kidney transplant surgery, has swung into action. Yesterday, Goyal met the heads of 11 public sector banks in Delhi. If Goyal has his way, the small and medium enterprises in India could get a respite from<a href="https://www.businessinsider.in/indias-small-businesses-are-suffering-from-a-shortage-of-credit-options/articleshow/63683278.cms"> their credit shortage</a> in the near future. The finance ministry is reportedly planning to ask the Reserve Bank of India (RBI) to ease lending restrictions imposed on the public sector banks under its Prompt Corrective Action (<keyword id="6383105" type="UNKNOWN" weightage="20" keywordseo="pca">PCA</keyword>) framework. Goyal is said to have instructed the top management of these 11 banks to formulate a recovery plan, one that is expected to include<a href="https://economictimes.indiatimes.com/news/economy/policy/deadlines-likely-for-turnaround-of-psu-banks-under-rbi-watch/articleshow/64195708.cms"> deadlines and targets</a> for loan recoveries, asset sales and risk reduction. After meeting the heads of Dena Bank, Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce and Bank of Maharashtra, Goyal told media outlets that the central government would extend all the support to strengthen the banks placed under RBI’s PCA framework so they could revive their lending operations. What is RBI’s Prompt Corrective Action framework? The RBI introduced the PCA framework to impose restrictions on lending, as the earnings of banks declined and their <keyword id="142154" type="PERSON" weightage="20" keywordseo="bad-loans">bad loans</keyword> piled up. The public sector banks had nearly ₹7.8 trillion worth of bad loans at the end of 2017, over 90% of all total bad loans among India’s banks. Eleven out of India’s 21 government-owned banks, including IDBI Bank, Indian Overseas Bank and Oriental Bank of Commerce, are on the central bank’s watchlist due to their high level of non-performing loans and declining earnings. The PCA framework not only imposes restrictions on credit, but also on capital expenditure, salaries for senior managers and mandates higher provisioning for defaulted loans. In a worst case scenario, the RBI may even ask a weak bank to merge with others. How the PCA framework affects small businesses The restrictions imposed on the public sector banks directly affect the flow of credit to small businesses, which are estimated<a href="http://www.dnb.co.in/Publications/LeadingSMEOfIndia2017/Leading-SMEs-of-India-2017.pdf"> to account for 38% of India’s GDP</a>. Micro, small and medium enterprises derive<a href="https://udyamimitra.in/Default/DownloadFile/MSME_Pulse_Report.pdf"> a little over 55%</a> of their financing from public sector banks, which are mandated to provide cheap financing to them under the government’s priority sector lending guidelines. However, the credit options for these firms have dried up, not only due to<a href="https://economictimes.indiatimes.com/small-biz/sme-sector/indias-small-businesses-find-credit-in-short-supply-after-mega-fraud/articleshow/64188001.cms"> a series of banking frauds</a>, but also as more lenders have been placed under the PCA framework. Last week, the RBI imposed<a href="https://www.thehindubusinessline.com/money-and-banking/rbi-puts-dena-bank-under-prompt-corrective-action/article23862585.ece"> further restrictions on Dena Bank,</a> which was already on its watchlist. This included a total ban on all lending and hiring. The move followed the release of Dena’s financial results for the year ended March 2018. Its net loss widened to ₹19.2 billion while its bad loans reached a staggering ₹163.6 billion. If the bank’s financial situation deteriorates, it could be liquidated. A few days earlier, the RBI imposed similar restrictions<a href="https://timesofindia.indiatimes.com/business/india-business/rbi-puts-deposit-lending-restrictions-on-allahabad-bank/articleshow/64163095.cms"> on Allahabad Bank</a>. In order for banks to be taken off the watchlist, they need to be profitable for a period of two years. Goyal is likely to ask the RBI to amend the conditions for removal of these 11 banks from the list or at least to ease the lending restrictions currently in place. The government and RBI have slightly conflicting interests here. While the former wants to make sure small businesses meet their financing needs, the latter does not want to encourage further lending, the very purpose of their existence. While a shortage in lending to <keyword id="44779" type="COMPANY" weightage="20" keywordseo="SMEs">SMEs</keyword> will jeopardise India’s economic growth, the premature easing of restrictions on India’s public sector banks could send their balance sheets into a further tailspin. However, India’s GDP growth in the short term might just be worth a delay in the revival of these banks. It is election year, after all.

You Searched For "micro lending" and got 7 results

After conquering the smartphone space, Xiaomi now wants to enter India’s fintech industry

Prabhjote Gill

Micro enterprises best placed to help economy come out of COVID-19 crisis: Report

PTI

Google-backed Aye Finance brings on board former Hero Fincorp Chief Business Officer

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Provide sovereign guarantee to banks for addl exposure to NBFCs: FIDC

PTI

Aye Finance gets Rs 107 cr in debt funding from BlueOrchard

PTI

On lending by banks to NBFC, HFCs to be part of priority sector in FY'21: RBI

PTI

India’s small businesses could escape their short term financing issues

Dilsher Dhillon

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