New Delhi: State Bank of India (SBI) is working on a new system to make it easier for small businessmen to take loans. Under this, loan eligibility can be assessed considering the records of business sales and digital payments. The special thing is that this system is expected to benefit those small shopkeepers and businessmen who do not have GST registration, but regular transactions in their business are done through UPI.
SBI senior officer and managing director Ashwini Kumar Tiwari has given information about this proposed arrangement. The bank believes that digital payment records can be useful in understanding the actual activities of small businesses.
How to get loan from UPI data?
Generally, banks look at a businessman’s income, sales, tax records and other financial documents before giving a loan. In case of businesses with GST registration, this process is relatively easy. But many times such documents are not available with small businessmen.
In such a situation, the record of payment made through UPI can become an alternative basis. If digital payments are being made continuously in a shop or small business, then sales can be estimated from these transactions. SBI is moving towards creating a UPI based solution on this basis.
Why will it be easier for businessmen without GST?
It is often difficult for businessmen who do not have GST registration to get a loan from the bank. A major reason for this is that banks do not have adequate digital records of their sales and income. According to Ashwini Kumar Tiwari, the bank has solved this challenge to a great extent for the businessmen registered under GST. SBI has given loans worth about Rs 1 lakh crore in the last 18 months using GST and PAN data.
Now the bank is trying to reach out to those businessmen who do not come under the purview of the GST network.
What data can the bank use?
Apart from UPI, information from other digital sources can also be used in such credit assessment models. According to Tiwari, after getting the customer’s consent, the bank can also use some information received from telecom companies along with data related to UPI payments.
However, customer consent and data security will remain key issues in such a model. The bank must ensure that the information used is in accordance with the rules and is used only with the permission of the customer.
Which small businessmen can benefit the most?
The benefit of this system can be availed by those shopkeepers, traders and small businessmen whose business is regular and who have a consistent record of UPI payments.
For example, if a small shop has a large number of customers making UPI payments every day, these transactions can help the bank understand business activity. This can open the way for those businessmen who lack traditional documents to get loans from the formal banking system.
What will change with the new system of SBI?
If this model of SBI is successful, then the process of taking a loan for small businessmen can become easier and faster than before. Especially businessmen working without GST registration can benefit from this.
For banks too, digital transaction data can become an additional means of understanding business efficiency. However, after the implementation of this system, the conditions on which loan approval will be done and how much importance will be given to UPI transactions will depend on the final model and related rules of SBI.
