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Abigail AaronsonParticipant
Personally, I’m thrilled to see the positive response from stakeholders and industry experts regarding the new FLDG guidelines introduced by RBI. These guidelines provide much-needed clarity to the relationship between REs and LSPs, making it an enabling move by the regulator.
As a fintech community member, I’m excited about the potential impact of these guidelines. They serve as a catalyst for expanding micro-sized loans and fostering inclusivity in lending. Transparency is enhanced by requiring LSPs to publish guarantee arrangement details on their websites.
The directive to invoke the First Loss Default Guarantee within 120 days emphasizes timely resolution of defaults, benefiting both lenders and borrowers. These guidelines are expected to foster healthy competition, lower lending rates through robust underwriting platforms, and drive further improvements in the lending sector.
These guidelines represent a significant step forward, providing a conducive lending environment, financial inclusion, and a personalized approach to lending. The industry is optimistic about their positive effects on credit penetration, borrower actions, and the overall lending ecosystem.
May 9, 2023 at 10:58 am in reply to: In light of the recent budget, how do the updates to DigiLocker services benefit MSMEs? #1316Abigail AaronsonParticipantDigiLocker services can greatly assist MSMEs in various ways. The recent budget announcement expanded DigiLocker’s scope, introducing two important updates. Firstly, DigiLocker will expand the documents available for individuals, facilitating fintech services and simplifying KYC. Secondly, an Entity DigiLocker will be established specifically for MSMEs, large businesses, and charitable trusts. This entity-based DigiLocker will enable secure storage and sharing of documents with authorities, regulators, banks, and other business entities.
DigiLocker, a digital document wallet initiative by the government, aims to enable paperless governance. It empowers individuals and businesses with easy access to digital documents and certificates. By making DigiLocker a part of the public digital infrastructure, fintech companies can reduce costs and enhance the ease of doing business. However, further work is needed to ensure document security and prevent unauthorized access or misuse.
These updates are expected to benefit MSMEs by simplifying the KYC process. This will lead to quicker access to finance, reduced KYC costs, improved efficiency, and increased services to underserved parts of the economy.
To leverage DigiLocker for your business, you can register and activate an account on the official website. You can also upload relevant documents following the provided instructions.
February 9, 2023 at 10:07 am in reply to: Can small and medium-sized enterprises (SMEs) in the IT sector have better access to trade financing via the use of blockchain technology? #1222Abigail AaronsonParticipantYes. Small- and medium-sized enterprises (SMEs) are almost 90% dependent on banking funding, which can lead to financial difficulties during financial turmoils. Blockchain technology is facilitating, speeding up and increasing the efficiency of these types of new-generation alternatives, such as DeFi tokens, flash loans, direct peer-to-peer lending and borrowing, low-cost capital via B2B (business-to-business), crowdfunding, and other public funding schemes such as Initial Coin Offerings (ICOs). Blockchain technology also has the potential to enable low-cost credit scores to get loans, and ICOs are a new type of crowdsourcing instrument that provides financing to projects by selling access rights to the products to be produced. Blockchain technology has many advantages, such as increased transparency, formality and traceability, decreased informal transactions, social transfers and welfare transfers, economic activity being recorded and formalized, transaction costs and risks being decreased, making transactions safer and secure, and increased sustainability.
However, there are also disadvantages and weaknesses, such as too many fund transfers toward digital wallets, Tougher identity verification mechanisms, limit controls on the highest amount users can hold, and complex and nontransparent credit markets. MSMEs can build a stronger support network, gain access to new opportunities, and navigate challenges more effectively.
January 16, 2023 at 7:00 am in reply to: How do MSMEs in Singapore apply for government programs and schemes? #1160Abigail AaronsonParticipantCheck the Enterprise Singapore Website to learn how to apply for ENTERPRISE DEVELOPMENT GRANT (EDG):
January 9, 2023 at 11:40 am in reply to: How can technology be used to improve the financial operations of MSMEs? #1112Abigail AaronsonParticipantDuring the COVID-19 epidemic, the increased digitalization of finance has contributed to facilitating MSMEs’ access to and use of important financial services and products.
Technology can contribute to developing a secure and friendly environment for the automation of MSME finance post-crisis.
Lending – Utilizing digital technology for identifying/verifying qualified receivers and micro, small, and medium-sized enterprise loan disbursement has successfully integrated these underserved segments into financial aid programs.
Data – By encouraging the seamless interchange of digital MSME data between important stakeholders, such as relevant public authorities and credit guarantee funds, policymakers can assist participating lenders in assessing MSME candidates who may be eligible for a financing program.
Non-bank financial services and instruments – Enabling regulatory and policy conditions to promote small business access to a broader array of equity or quasi-equity financing solutions.
In addition, technology has had a significant impact on MSMEs in multiple ways:
1.Establishing a robust and comprehensive digital financial network at the national scale, such as interoperable payment and e-ID network systems.
2.Offsetting AML/CFT, cybersecurity, and fraudulent risks against which the majority of MSMEs are inadequately protected.
3.Strengthening consumer information privacy and protection requirements, particularly for vulnerable and excluded populations susceptible to theft and data fraud incidents.
4.Encouraging digital financial skills among the vulnerable sections, including rural residents, youth, informal MSME groups, and women.
5.Fostering a robust and conducive regulatory structure in DFS to enable involvement and innovation from the private sector.
6.Encouraging the reduction of the trade finance gap for MSMEs and the increased exclusion of small enterprises from GVCs. This might help expand market entry opportunities for lower-tier segments.
7.Facilitating access for micro, small, and medium-sized enterprises to the digital world and aiding small firms with their digitization processes and skill development. Developing an inclusive framework and collaboration with the assistance of digital platform operators in order to increase MSME involvement in mobile and online marketplaces.
8.Supporting the creation of digital insurance products coupled with financial products to protect vulnerable MSMEs from shocks.January 6, 2023 at 12:13 pm in reply to: Can you explain the key distinctions between the NASDAQ Capital Market and the NASDAQ Global Market for Small and Medium-Sized Enterprises? #1086Abigail AaronsonParticipantNasdaq Capital Market, Nasdaq Global Select Market®, and Nasdaq Market® are the three distinctly different levels of the Nasdaq Stock Market. In order to be listed on one of these market levels, SMEs must first meet specific financial, corporate governance standards, and liquidity. Similarly, the Nasdaq Global Market has stricter first listing criteria than the Nasdaq Capital Market does, and the Nasdaq Global Select Markets has stricter initial liquidity and financial requirements than the Nasdaq Global Market does.
December 15, 2022 at 11:54 am in reply to: What part does Nasdaq play in the business finance options available via the small and medium-sized enterprise ecosystem? #1051Abigail AaronsonParticipantWe appreciate your quick response. This is indeed useful and informative.
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