Financial inclusion 23-24, A golden ticket for Indian businesses to shine

Modified on Tue, 11 Apr 2023 at 02:45 PM

 Human interaction with money has changed over the years, especially in business. COVID-19 and Digitalization have 
 revolutionized the financial sector with the idea of Financial Inclusion by the Indian Government.  

 Considering all the accelerating factors in the Indian financial sector, the Union Budget of 2023 emphasized financial inclusion
 targeting MSMEs and start-ups.

The Aims of Financial Inclusion for 2023

Considering the MSME sector as the "growth engine," the revamped scheme will lower the cost of credit by 1%, with
the allocation of ₹22,138 crore, which is collateral-free credit.
The Finance Ministry has planned to infuse ₹9,000 crores into the Credit Guarantee Fund Trust for Micro and
Small Enterprises Credit Guarantee Scheme. This funding also covers the Credit Guarantee Scheme revisions
implemented in December 2022.
FM has proposed to set up an "Entity Digi Locker" that MSMEs, large businesses, and charitable trusts can utilize
to store and share documents online with financial authorities, regulators, and banks. The Digi Locker service helps with
reconciliation and updates the data of account users. These initiatives are expected to substantially smooth the
onboarding process for small businesses and customers of fintech firms.
The Finance Ministry will launch a unified skill India digital platform to expand India's digital ecosystem further to
facilitate demand-based formal skill training and access to entrepreneurship schemes.
The Union Budget 2023 has finally promised to rationalize and streamline the onboarding of small businesses into
FinTechs.

The suggested amendments to the Reserve Bank of India Act, the Banking Companies Act, and the Banking Regulation Act are 
intended to strengthen investor protection and better bank governance. This effort will support banking authorities in fostering 
improved credit facilities, promoting financial inclusion, and bolstering the internal mechanisms and operations of fintech and 
data-driven credit disbursement businesses. 