India Pushes Cash Flow Lending to Boost MSME Credit

Anurag Khandelwal, a partner at Price Waterhouse Chartered Accountants LLP, stated that the Indian government's push for cash flow-based lending will improve credit access for micro, small, and medium enterprises (MSMEs). Speaking at a Confederation of Indian Industry session in New Delhi, Khandelwal noted that these reforms are designed to strengthen the financial positions of MSMEs and enable additional lending.

Khandelwal highlighted the Trade Receivables Discounting System as a successful platform for addressing delayed payments through supplier financing. He observed that government authorities are working to improve overall cash flow situations for the sector, which contributes 37-38 percent to the Indian economy. He also linked these initiatives and recent free trade agreements to the inclusive growth goals of the Viksit Bharat 2047 vision.

While Khandelwal acknowledged potential implementation challenges, he expressed confidence in the government's strategic focus on the sector to ensure credible growth.