Budget 2020 Expectations for Housing, MSME: This year’s budget should announce measures for reviving housing demand, promote digital payments, improve credit access and incentivise taxpayers to focus on their long-term financial fitness.
Budget 2020 Expectations for Housing, MSME: The Budget 2020 comes at a time when India is facing challenges in the form of low credit off-take, dipping consumption, stagnant private investment and slowdown in the crucial housing and MSME segments. This year’s budget should announce measures for reviving housing demand, promote digital payments, improve credit access and incentivise taxpayers to focus on their long-term financial fitness. Here is my wishlist for the Budget 2020:
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Include credit to first-time borrowers in banks’ PSL target
Most banks and NBFCs prefer lending to those having a credit score of over 750 and monthly in-hand income of Rs 30,000 and more. Eligibility criterion like these hinder credit access to ‘new to credit’ loan applicants and those belonging to lower-income groups. While Small Finance Banks and Micro-Finance Institutions are playing a major role in improving institutional credit access to these under-banked segments, the cost of credit from these providers is too high. Hence, unsecured loans sanctioned to new-to-credit borrowers with annual income below Rs 3 lakh should also be included in the ‘PSL’ target of banks. This will improve access to institutional credit for the under-banked and subprime sections and decrease their credit cost.
Source: Financial Express
