Enhancing MSME Credibility: The Udyam Portal Solution

RBI Deputy Governor Swaminathan J emphasizes the importance of formalization for MSMEs, urging them to register on the Udyam Portal and file GST returns to enhance their credibility. Speaking at a forum, he highlighted the need for MSMEs to embrace digital payments and maintain accurate financial records to overcome credit access challenges.

Speaking at the CEO Forum of the Federation of Telangana Chambers of Commerce and Industry, RBI Deputy Governor Swaminathan J urged Micro, Small & Medium Enterprises (MSMEs) to register on the Udyam Portal to bolster their credibility and gain easier access to credit.

Swaminathan stressed that the continued informal operations of many MSMEs hinder their ability to secure timely and adequate formal credit. The informal nature fuels information asymmetry, complicating lenders' assessment of MSMEs' creditworthiness. He advised MSMEs to embrace formalization by filing GST returns to increase transparency over their business activities and financial health.

The Deputy Governor also recommended that MSMEs adopt digital payment systems to create a digital footprint of their financial transactions, helping maintain clear financial records and gaining lenders' trust. He emphasized the role of formalization and advised MSMEs to keep accurate financial records for better credibility with lenders.

(With inputs from agencies.)