THE CURRENT INDIAN FINTECH INDUSTRY: EXPLORING THE EXPANSION, CONFUSIONS, AND OPPORTUNITIES FOR MSME’S
Author – MUSKAAN AGGARWAL, Student at O. P. JINDAL GLOBAL UNIVERSITY
Best Citation – MUSKAAN AGGARWAL, THE CURRENT INDIAN FINTECH INDUSTRY: EXPLORING THE EXPANSION, CONFUSIONS, AND OPPORTUNITIES FOR MSME’S, Indian Journal of Legal Review (IJLR), 3 (2) of 2023, Pg. 53-63, APIS – 3920 – 0001 & ISSN – 2583-2344.
ABSTRACT
Over the years, access to finances has been one of the key issues faced by MSMEs, especially considering that the emerging companies lack a proper CIBIL score, or the required credit history, making it difficult for them to secure loans, especially through the traditional methods of Banking. Regulatory and privacy concerns continue to surround the growing plans of the sector, leading to a precarious situation of unclear regulations and frequent changes. While it might be argued that the precarious situation shall only pave way for a robust ecosystem of lending in India, however, it cannot be denied that the current stage of confusion is capable of having a negative effect on the growth of MSMEs, especially considering the various regulations that are coming in and going out related to digital lending.Therefore, this article shall aim to highlight the regulatory concerns with the current digital lending regime, especially in the context of MSMEs, considering that they shall be the first to bear the brunt of the unclear fintech landscape. The first part of the article shall provide a brief summary about the historical transformation from traditional lending to digital lending in India, through a discussion on the shortcomings of traditional lending and the advantages of digital lending. The second part shall discuss the growth of fintech industries and digital lending, along with a discussion on Budget 2023. The third part of the article shall discuss RBIs digital lending regulations. The fourth part shall discuss the concerns with the current regime of digital lending, and the last part shall provide some recommendations for the government to provide a suitable lending mechanism for MSMEs in India.