Banks are redrawing their strategies on funding micro, small and medium enterprises (MSMEs), expecting the transition to the goods and services tax (GST) will improve their credit profiles and enhance their borrowing capacity. The strategies mainly comprise launching new products and hand-holding existing MSME borrowers in improving cash flow prediction models and GST compliance. MSMEs are starved of capital because of limited access to bank credit. One of the key reasons for this has been lack of documentation and wherewithal to predict future cash flows, maintain accounting, and comply with taxation. Since the GST implementation, banks have seen a rise in demand for working capital from MSMEs. The SME loan book growth of banks is expected to be in the range of 5-7% annually in the next 2-3 years. On the other hand, non-banking financial companies would increase their SME lending book at a much faster rate of 20-25%.MSME loans have been de-growing for the past few months as the sector faced issues owing to demonetization and later the transition to GST. However, the de-growth, which had peaked in the months following demonetization, has been showing signs of stabilizing.
The board of IndusInd Bank Ltd has approved the merger between the bank and microfinance firm Bharat Financial Inclusion Ltd (BFIL). IndusInd said that a wholly owned subsidiary will be incorporated for facilitating the merger which will primarily be engaged as business correspondent by the bank. The merger will allow IndusInd to increase its customer base and deepen its reach in unbanked and underserved regions of the country.
Drug major Sun Pharmaceutical Industries will increase stake in its subsidiary Ranbaxy Malaysia to 79.5 per cent through purchase of shares. One of the wholly owned subsidiaries of the company has agreed to increase its shareholding in Ranbaxy Malaysia by 8.3 per cent. Ranbaxy Malaysia is a subsidiary of Sun Pharma, and the company along with one of its wholly owned arms has 71.2 per cent shares prior to the acquisition.
Amicus Capital has struck its maiden deal, having invested Rs.60 cr. in online insurance aggregator RenewBuy. This is the second round of fundraising completed by the Gurgaon-based D2C Consulting, which owns and operates RenewBuy.
Social e-commerce startup Meesho has raised $3.1 million from investors led by SAIF Partners in a fresh round of funding. Existing investors Y Combinator and Venture Highway also participated in the round. The company plans to use the fresh funds to hire for its tech and business operation teams.