The paper also suggests that one of the conditions

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The paper also suggests that one of the conditions for a company to be eligible as Accredited Investor under the crowdfunding platform is that such a company should have minimum net worth of INR20 crore. In our view, minimum net worth criteria of INR20 crore specified for companies to be eligible as the Accredited Investors is on the higher side and hence, it is recommended that the same can be in the range of INR3 to 5 crore. This suggestion is in line with the minimum net worth required for an NBFC. Various high net worth individuals also prefer to invest through companies and hence, this limit of INR20 crore may be deterrent factor for them. This way the base of lenders on crowd funding platform could increase which may eventually lead to the development of crowdfunding in India. 02 The government and financial institutions need to work in harmony for all players in the MSME lending ecosystem to thrive and address the current challenges plaguing them. Institutions such as the SEBI, which helped establish an MSME exchange on both the BSE and the NSE, need to ensure that the listing norms require minimal disclosure without hampering the interest of investors, have relaxed public shareholding requirements, make sure paperless processes take effect and provide an opportunity for anchor investors to invest in MSME stocks on the exchange. 03 A major source of financing for MSMEs comes from non-MFI NBFCs. These NBFCs are reliant on banks for their funding. Policies can be made around NBFCs to give them incentives for a more focused lending approach to MSMEs. Also, the funds disbursed for MSMEs must be tracked to ensure proper utilisation of funds. Regulations and frameworks must be developed to manage short-term and long-term crisis. As the MSME sector suffers from closure very often, the process of closure or rehabilitation must be smooth and cost-effective. A rehabilitation framework must be in place to manage short- term crisis as well as a business closure framework to manage a smooth business exit. For banks, lending to MSMEs must be made a lucrative and profitable option through policy measures such as increasing the limits under CGTMSE, effective monitoring of CGTMSE policy, simpler restructuring of MSME Non Performing Assets (NPAs) and low cost credit schemes for micro industries and budding startups. 02. Consultation Paper on peer to peer lending, Reserve Bank of India, April 2016 03. SMEIPO platform- Learning and way forward, Mahavir Lunawat, 2 June 2016 © 2017 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved
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The new tax system is expected to provide an opportunity to MSMEs to get easy access to credit as GST filings can act as an alternate source of data. This would eventually reduce the risk for lenders by accessing authentic information on micro and small businesses, thus leading to reduced cost of business and speeding up of lending process. Handholding
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