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

MSME financing

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.

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