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Quote on GST from- Aye Finance, CBRE

Quote on GST from- Aye Finance, CBRE

"One of the biggest tax reforms post-independence, the Goods and Services Tax (GST) is set to bring forth unprecedented transformation of the Indian economy. There is a lot of conjecture around the preparedness for GST across industries, especially the MSME sector. But I strongly feel that GST will prove to be a strong enabler for systematic growth of the MSME sector as it will provide an impetus for Digitization of the sector and promote their Financial Inclusion.

With the micro and small businesses migrating towards digital book-keeping, they would be better predisposed towards fulfilling the eligibility criteria for credit facilities.  This will allow NBFCs like ours, which currently have to rely on data analytics and alternate intelligence tools, to make a better assessment of their credit worthiness and offer a line of credit at economical terms, " said Mr. Ashish Sharma- Head of Finance, Aye Finance

Aye Finance P Ltd
Company Profile

Aye Finance is a new age finance company providing business loans to the small and micro enterprises across India. Founded by professional bankers Sanjay Sharma and Vikram Jetley in 2014, Aye Finance continues to chart an exciting growth path in this under banked segment while maintaining a high benchmark for credit quality. Headquartered in Gurgaon, it has 33 branches employing over 450 employees. As a Non-Banking Financial Company, Aye Finance is proud to make business loans against mortgage or simple hypothecation accessible to India’s thriving and underserved MSME sector.

The MSME sector in India is challenged by a funding gap of over INR 5 trillion, as estimated by the industry. Most banks and financial companies had assumed the segment would be unprofitable and too risky, due to lack of formal business documents and small size of the loan.

Aye Finance is a commercial institution built around the mission to solve these challenges of funding MSMEs and enabling their inclusion into the mainstream of the economy. Aye Finance is equity-funded by three reputed Venture Capital Funds – Accion International, SAIF Partners and LGT Impact ventures. It also has over a dozen providers who extend their debt funds for its MSME finance business.

Aye Finance differentiates itself by creating a technically enabled process that builds credit insights through a variety of available business and behavioral data. This effective credit appraisal coupled with the use of modern workflow automation, and a small but engaged workforce is helping bridge the gap between the MSMEs and organized lending. The cloud-computing architecture enables flexibility delivery of customer service at an affordable cost. It is part of Aye Finance’s vision to leverage modern technology for multiplying the productivity of field force, early detection of frauds and lowering operational risks.

Aye Finance prides itself in an engaged team that is unified behinds its mission. The expertise of its founders is amplified by a talented leadership team with deep knowledge of the domain. Besides its robust commercial operations, the Company also funds its non-profit initiative to coach MSMEs on market knowledge, business book-keeping and advising on operations techniques.

Micro and small businesses financed by Company in turn helps sustain employment at the bottom of the pyramid.  Aye Finance and has already impacted an ecosystem of over 100,000 families through its business enterprise loans and it is driven by a vision to impact over 10 mn households by 2020 and become admired in their space.

Comment on GST by Mr. Anshuman Magazine, Chairman India & South East Asia CBRE

Mr Anshuman Magazine, Chairman, India and South East Asia, CBRE

"GST is unarguably a breakthrough reform the country has seen since our Independence. In its entirety, the new GST reforms promise efficiency, subsuming many indirect taxes.
With GST coming into full force on the 1st of July, the real estate sector will see a much-needed renaissance across its various segments. The impact on the overall economy will filter through to the real estate, construction, and warehousing sector. In construction, inputs such as cement and ceramic, tiles, building blocks and bricks, prefab structural components for buildings among others have been placed in the 28 percent category whereas, other components such as iron and steel have been placed in the 18 percent bracket. Work contracts addressing construction intended for sale were classified as a service and were placed in the 12 percent category.

It is noteworthy that the value of land would be included in the amount charged from the end-user. Pradhanmantri Awas Yojna (PMAY) has been exempted from GST. Unlike the previous regime, input tax credit has been permitted for the real estate sector. Moreover, ITC has a dual benefit - it will also increase tax compliance as it is only available upon purchase from GST registered vendors. Most importantly, the GST's anti-profiteering provision enforces the benefit of ITC to the end user- a move which is likely to be positive for reducing project costs, which in turn might trigger buyer enthusiasm.

As a landmark economic reform, GST can create the transparency needed to encourage investment. Globally, a unified tax structure has been one of many catalysts for investments. It will thus be an asset for India, to enhance its economy's resilience and achieve a high growth trajectory. With the scale of the real estate sector, it can create a cascading impact on economic growth across major business segments."