Notes

As per GSTN and udyam data, the largest target segment of MSMEs in India are micro 90% and 9% small enterprises in services and retail segment. Traditional methods for WC, like CC, OD used by Banks, have constraints in assessment of small value credit for this segment and monitoring of end use, stocks, etc., besides being compliance heavy for MSEs. The business loan (term loan) product provided by most NBFCs is simple to dispense but does not match with WC cycle of the MSEs due to which they have to regularly seek new loans and, in the process, many a times, end up taking multiple loans from different lenders. Business loan product also has limitations in terms of monitoring of end use. GST Sahay application has been developed by SIDBI and OPL using Open Credit Enablement Network framework with the objective to provide on tap working capital to MSEs by using various components of India stack and rich data using the rails of GSTN and Account Aggregator framework and addresses the aforesaid issues. The App was tested in RBI sandbox. GST Sahay credit assessment is cash flow based (rather than asset based), dispensation is on tap (as and when needed), “purpose based” (against a sale or purchase invoice) and the applications can be embedded in the sales and purchase cycles of the borrower or in the supply chain management systems of OEMs. The App has a simple user experience wherein minimal inputs are sought from the borrowers.