Microfinance industry seeks special funding, tax relief on affordable housing from Budget 2024

The non-bank industry which includes the microfinance industry (MFI) is expecting the union government to allocate special fund for the sector from the Union Budget for 2024-25.

HP Singh, chairman-cum-managing director at Satin Creditcare Network, said that the industry has reported robust growth after the pandemic and funding assistance from the Union Budget could further help the growth cycle. “Considering that a large part of the rural population is still underpenetrated, enhancing financial inclusion is the need of the hour. The NBFC MFIs will welcome any further government support for special fund allotment providing growth capital to the sector.”

Nishant Lakkar, founder and chief executive of AAA Rating Consultants and Advisors, called for dedicated funding support for MFIs with concentrated focus on small and medium enterprises (SMEs).

The industry players also suggested that the budget should bring in reforms for tax relief on profits earned from developing and building affordable housing projects. “To incentivise developers to build more affordable housing, the government should consider reintroducing the 100 percent tax holiday benefit previously available under Section 80-IBA of the Finance Act, 2016. This provision would offer tax relief on profits earned from developing and building affordable housing projects," Singh said.