Friday, October 02
Non-institutional channels of borrowing such as moneylenders, shopkeepers, and family constitute a major chunk of borrowing for the poor despite several initiatives to promote financial inclusion, shows a study by Piramal Enterprises.To enhance the share of formal finance, Debopam Chaudhuri, Chief Economist, Piramal Enterprises, says that non-banking finance companies can step in to bridge this gap, provided they are given access to cheaper resources such as the ability to raise fixed deposits and a liquidity backstop window by the RBI to secure short-term loans for top-tier NBFCs.The findings of the report show micro-business owners and economically weaker segments (EWS and LIG) remain underserved in terms of access to formal credit, while banks and finance companies are targeting Tier 2
