Parliament Passes Factoring Regulation (Amendment) Bill

On 29th July, 2021, the Parliament passed the Factoring Regulation (Amendment) Bill that seeks to amend the Factoring Regulation Act, 2011.

  • The Bill has incorporated many suggestions from the U K Sinha Committee.

Objective

  • To open up factoring business to non-bank lenders and thus address the capital needs of small businesses.

Need

  • There is often a delay in MSMEs getting payment against their bills for supplying to various buyers.
  • This leads to locking of working capital and hampering productive activities of MSMEs.
  • Factoring credit constitutes only 2.6 per cent of total formal MSME credit in India.
  • It’s estimated that only 10 per ....
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