(MENAFN- KNN India) Budget 2019: Govt should look at alternative financing option like P2P lending to solve MSMEs' credit woes
New Delhi, 26 June (KNN) As Budget is about to come in few weeks, it's time for the government to look at alternative financing option like P2P lending to solve the credit crisis in Micro Small and Medium Enterprises (MSME) sector, said Rajiv M Ranjan, Founder & CMD, Paisa Dukan.
While sharing the budget expectations, he said, 'Getting access to institutional credit has been one of the major problems of the MSMEs and to maintain the wealth of the Indian middle class, P2P lending can turn a milestone.
He suggested that upcoming annual Budget should waive off tax on the interest earned by an individual investor through P2P lending to encourage the retail investors for active participation in lending activities at P2P lending platforms.
For better financial inclusion, he stated 'While a great boost to the P2P industry would be via the regulator easing lending caps, we look forward to a critical role from the finance ministry for better financial inclusion by extending certain percentage exemption via Section 80C and also flexibility of handling defaults under a capital loss. These steps will ensure a great reach as an asset class and also better credit access to customers.
He said that the budget is a great opportunity for NDA government to win back trust of micro & small enterprises (MSEs) and start-ups.
To mobilize individual savings, he suggested 'Making investments in P2P lending, tax-free, akin to investments in certain mutual funds and other such investments can be placed under Section 80C of Income Tax law.
He recommended that a lender should be allowed to set off or carry forward his losses as currently prevalent in other forms of investment.
'It would be great if our industry is also given tax exemptions under the Income Tax Act. Tax exemptions can solve problems of MSMEs and consumer credit woes as P2P will become more attractive for lenders. More supply of lenders will lead to more credit going into the economy, Ranjan added further. (KNN/VS)
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