Financial challenges inhibit the growth, diversification, and sustainability of MSME sectors and are especially acute for informal MSMEs. Informality, information asymmetry, and lack of collateral restrict the financial choices of MSME firms. The solutions to such challenges include leveraging newly developed fintech platforms, cooperative models to address the informality issue, and digital tools to mitigate the adverse impact of information asymmetry. This Policy Brief presents a robust fintech model that would provide redressal for the financial difficulties faced by MSME units. The G20 should act proactively to deal with such difficulties faced by firms in G20 as well as non-G20 countries.
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