‘Goods and Services Tax’ (GST) is a unified indirect tax which replacing all the other indirect taxes present in India such as sales tax, Value Added Tax (VAT), entertainment tax and service tax. The taxation system of India so far has been a complex web of different corporate, property and personal income taxes which made it seem opaque and vague. Until recently, different states followed different indirect tax rates for managing the movement of goods. Not only did the tax rates differ from state to state, but the types of tax were also inconsistent. The country’s complex taxation system has often been attributed as one of the barriers to not only growth of real estate sector but overall economic growth. Read more »
The contemporary digitized era has welcomed the innovative ways of transactions in the market. Today’s market boasts of speed, safety and convenience. Consumers are flooded with vast array of digital payment platforms, online shopping and cashless transactions. In addition sellers too are offered the equal opportunities of handling and managing their sales (Reserve Bank of India 2016). One such unique feature of conducting digital transactions is through payment terminals.
Being in business for about more than 30 years, microfinance institutions still have to face risks. There is a need to build strategies to mitigate risks. Some of the major reasons include:
- high dependency on rural population on agriculture which itself is dependent on monsoon,
- lower income of people,
- less employment opportunities in rural sector
In the previous article, the need for credit risk management in small scale microfinance institutions was reviewed. Small scale micro finance constitute a sizeable chunk of the entire microfinance industry in India. Microfinance institutions face large amount of credit risk today. Keeping that in mind these institutions are using different approaches and techniques. This has been done to mitigate the risk pertaining to the failure of repayment by the customers.
Micro finance institutions operate in the Indian economy with the ultimate objective to serve the financially poor section of the society. This is done by providing them with financial support and credit services (Lyuirika, 2010). However, their objective of financial stability and their long term viability can’t be overlooked. Very often, the task of managing both the purposes becomes a bothered grindstone for such Micro Finance Institutions. The reason behind the same lies in the fact that the unprivileged section, to whom the loans are provided, lacks a stable income to provide the collateral to the loan amount. Many a times, to fulfill the objective of generating regular cash flows in the institution, proper credit risk analysis is total ignored.
In the recent time the recession in the real estate sector has become one of the most interested topic among the researchers. According to market experts the bubble in the real estate sector has burst. The prices of the real estate has decreased rapidly. Similarly the gap between the supply and demand has increased significantly in recent times (KPMG, 2014). Read more »
Owing to the increase in the economic development and growing Gross Domestic Product (GDP) of India, there is an increasing demand for financial assistance, especially in microfinance. This demand is not only from corporations and financially stronger groups but also from the lower sections of the society. The delivery of financial services to lower sections of the society is called financial inclusion. Most commercial banks in the country cater to the financial needs of people. The poor section of the society is deprived of financial assistance due to the absence of collateral/ financial security. For meeting the requirements of this segment, microfinance institutions (MFIs) were set up that acted as a provider for the underprivileged section of the society. Read more »
In the previous article, the author reviewed the need for credit risk management in microfinance institutions. Small scale microfinance institutions constitute a sizeable chunk of the entire microfinance industry in India. Owing to the large amount of credit risk faced by microfinance institutions today, the numbers of approaches and techniques have been devised by them in order to mitigate the risk pertaining to the failure of repayment by the customers. Read more »