Written exclusively for SMEpost.com by Rohit Arora, CEO of Biz2Credit

Biz2Credit India welcomes this move announced by the Govt. to demonetize the existing series of the high denomination notes of Rs. 500 and Rs. 1000. While the move is primarily aimed at curbing the menace of black money and counterfeit notes, what comes as a bonus is that our economy will move towards being a cashless economy. This is also expected to bring a healthy amount of deposits into the banking channel which will enhance the bank’s’ capacity to lend and improve the scope for lower interest rates.

There might be little hiccups for the SME sector due to a temporary shortage of the currency within the country resulting in lower discretionary consumption. However, as is evident from various steps being taken by the Govt. & RBI on regular basis, we see an active role being played by them to minimize the discomfort being faced by the public.

It highlights the sensitivity of the Govt. towards reducing inconvenience and at the same time, showing a strong intent to stand with the demonetisation decision. Further, we believe that the advent of digital wallets and other payment methods have absorbed the present situation of a cash crunch to a great extent.

SME sector emerges as a beneficiary in the longer run due to lower interest rates and increased economic activities. This is not a time to panic, but to support the Govt. initiative to curb the menace of black money and counterfeit notes. A day’s inconvenience is much better than continuing to live with the black money economy.