RBI governor Raghuram Rajan has said that lending to micro, small and medium enterprises ( MSME ) entrepreneurs particularly in the e-commerce space makes a strong business sense for the banks in the changing dynamics of the economy.

“Lending to MSME entrepreneurs, especially in e-commerce space makes a strong business case for the banks given the changing dynamics in the economy, such as, demographic patterns; urbanization trends; increasing disposable income and dependence on technology platforms; growth in Internet user base and availability of easy payment options,” Rajan said.

He said with continuous handholding of MSME entrepreneurs, bankers can help them sell their products on e-commerce space and reach a huge market space without having brick and mortar presence.

Financing MSMEs across the world has become very significant in recent years, he said, addressing MSME entrepreneurs in New Delhi who are also suppliers for e-commerce players like Amazon, Snapdeal and Flipkart.