HARNESSING TECHNOLOGY FOR CREDIT DISPENSATION: TRANSFORMING THE UNORGANIZED SECTOR

Small business or to be very specific unorganized small business is the economic foundation of India. 

-  Ajay Panday

About the author Ajay Panday Sr. Manager Zonal Learning Center Powai

It is perhaps one of the largest disaggregated business ecosystems in the world sustaining around 50 crore lives. The sector comprises of countless of small manufacturing units, shopkeepers, fruits / vegetable vendors, truck & taxi operators, food-service units, repair shops, machine operators, small industries, artisans, food processors, street vendors and many others.

Formal or institutional architecture has not been able to reach out to them to meet the financial requirements of this sector. They are largely self financed or rely on personal networks or moneylenders. Addressing this need will give a big boost to the economy otherwise this segment would remain unfunded and a portion of the productive labour force would remain unemployed.

The unorganized Small Business Sector accounts for a large share of industrial units. They feed large local and international value chains as well as domestic consumer markets as suppliers, manufacturers, contractors, distributors, retailers and service providers. The gross value addition of this sector is 6.28 lakh crore annually. Mainstreaming these enterprises will not only help in improving the quality of life of these entrepreneurs but will also contribute substantially to job creation in the economy thereby achieving higher GDP growth.