Arora said that small and medium-sized businesses are constantly facing credit shortages and it is about time the government came up with a specialized bank to meet their demands.
Biz2X is a turnkey global SaaS platform that enables financial institutions to deliver a customized online lending experience to their small and medium-sized business customers.
Furthermore, Arora emphasized that such a bank could also include a dedicated portfolio of income-linked credit instruments that will serve the credit needs of SMEs and also help diversify SME credit from the current system of collateral-based financing, which limits the practical side of running a small business.
Being fully digital, he says, such banks can process faster loan applications and payouts for SMEs, supported by advanced data analytics and technology-enabled decision-making.
“The current system of portfolio mapping and underwriting is a tedious and time-consuming process, involving extensive documentation and multiple visits to banks. Digital banking will accelerate loan processing, lower risk and scale faster to meet the lending needs of small businesses.” he said.
He said many major sovereign wealth funds, pension funds, multilateral agencies and major Indian private equity funds would like to invest in such an initiative given its huge economic potential.
About 6.3 crore MSMEs (Micro, Small and Medium Enterprises) provide more than 11 crore jobs in India.
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