George Alexander Muthoot, managing director of Muthoot Finance said “During the pandemic, MSMEs relied heavily on gold loans to meet their credit needs and the budget further has offered a big relief to MSMEs, which have been one of the most impacted sectors during the pandemic. In order to reduce the stress on the segment and increase the flow of funds, the government revamped the ECLGS scheme via the infusion of Rs 9000 crores in the corpus. This will enable collateral for Rs 2 lakh crore loans to small and medium-sized businesses. Further, 95% of the forfeited amount relating to bid or performance security will be returned to the MSMEs by the government and other undertakings. We also believe that the reforms announced with respect to the growth and development of the agricultural sector, animal husbandry and fisheries will further boost these sectors and support the economy. All these measures will positively enhance the scope of Gold-loan NBFCs like us, which are catering to the underbanked sectors of the society.”
Added Aditya Damani, Founder & CEO of Credit Fair “In the Budget FY24, the MSME sector got an enhanced lifeline by the infusion of Rs 9,000 crore to the credit guarantee corpus. It will enable additional collateral-free guaranteed credit of Rs 2 lakh crore, which is a big relief to the credit-starved sector. Further, the cost of credit will also be reduced by about 1%. Thus, largely, the MSMEs have received favourable treatment in the budget. More direct tax benefits like Rs 3-crore enhanced turnover limit to such units to avail presumptive taxation benefits are also offered to the micro-enterprises. For the NBFCs, the Centre’s decision to constitute the National Financial Information Registry and the continued financial support for the digital public infrastructure will be of great benefit. Moreover, the Centre’s focus on Green Mobility, by announcing Rs. 35,000cr towards energy transition and more clarity in the Vehicle Scrapping Policy will offer a fillip to the automobile finance business. Further, the government’s push for the speedy transmission of electric mobility solutions and higher allocation for green hydrogen production, and duty relief to domestic manufacturing of lithium-ion batteries will accelerate the EV finance segment.