Infosys Co-Founder Suggests Crypto Capital Inflow Can Solve India’s SME Financial Gap

Infosys

Nandan Nilekani, the co-founder, and chairman of Infosys published an opinion piece today on the growing SME funding gap in India and how cryptocurrencies can help in closing the gap. The opinion piece and bullish stance of India’s leading IT consultancy provider come at a time when the Indian government is reportedly working towards a blanket ban.

Nilekani in its piece highlighted that the Indian Small and Medium-size Enterprises (SMEs) face a great financial crunch which has become more severe during the ongoing pandemic. India has several important sectors that can attract capital including the internet and human resources, but cryptocurrency is one of the emerging sectors with the widest pool of investors that India has not yet completely accepted.

India already has important assets with which to attract global capital: the youth of its population, the energy of its tech sector, the growth of its internet connectivity, but what hasn’t yet been done is to integrate these assets into the new multi-trillion-dollar crypto economy, which may have the most risk-tolerant, internationally oriented, growth-seeking pool of investors in the world.

How Crypto Can Help in Lifting the SMEs

Indian SME sector comprises more than 60 million businesses, 10 million of which have verified taxation records and GST numbers. However, most of these SMEs don’t get adequate funding, and as per the latest records out of $1 trillion lending capital that is provided by banks only 25% flows into the SME sector creating a financing gap estimated to be worth $250 billion to $500 billion.

Nilekani in his piece suggested that this growing financial gap can be filled by allowing the $2 trillion crypto market to flourish which would bring in more diverse investors that could potentially aid the financially deprived yet a core part of the country’s GDP contributor. The recent surge in KYC-verified UPI digital transactions has already laid the foundation for crypto integration. He explained,

India has a unique opportunity to close the SME financing gap by attracting the new class of global crypto investors, by using everything the IndiaStack team has helped build over the last decade — particularly UPI, Aadhar, GST, and the informational collateral they generate —  to help connect the trillion-dollar crypto-economy to capital-hungry Indian entrepreneurs.

The Indian crypto sector is already booming post overruling of the banking ban by the Indian Supreme Court in March last year. One estimate suggests nearly $13 billion capital flowed into the crypto sector post the uplifting of RBI’s banking ban. Many renowned entrepreneurs in recent times have suggested that the Indian government must take a regulatory approach rather than a blanket ban.

The post Infosys Co-Founder Suggests Crypto Capital Inflow Can Solve India’s SME Financial Gap appeared first on Coingape.

Publication date: 
04/11/2021 - 12:23
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