E-lending firms recommend direct debit feature on UPI to help startups

BENGALURU: The digital lending industry has suggested that the RBI allow direct debit for loan repayment through the instant inter-bank funds transfer mechanism Unified Payments Interface (UPI), extend the ‘Udaan’ scheme to fintechs and nonbanking finance companies and make bank funding mandatory for early-stage fintechs.
The central bank, in its notification dated March 18, had sought the industry’s recommendations on what would help the micro- small and-medium industry come out of challenging times. Udaan is a central government-run credit guarantee scheme under which small enterprises can access loans from institutions without any collateral.
ET reached out to several fintech lending players to understand the difficulties in the MSME financing space and how things could be changed. Players like Capital Float, Lendingkart, Aye Finance, and Flexi-Loans, which are disrupting the way small businesses access finance, play a critical role in changing the way the sector operates.