These fintech startups are helping MSMEs get easy loans
The micro, small and medium-sized enterprises (MSME) sector is considered the backbone of the Indian economy. According to the India Brand Equity Foundation (IBEF), India is home to approximately 6.3 billion MSMEswhich contribute approximately 29 percent to the country’s overall GDP.
MSMEs generate significant employment opportunities and provide livelihoods for people in semi-urban and rural areas.
In fact, the Indian government has launched plans — including Prime Minister’s Job Creation Program (PMEGP), Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE), Digital MSMEsetc – to improve the sector so that it receives more capital to develop its activities.
Furthermore, India’s startup ecosystem has come forward to help small and medium enterprises (SMEs), especially amid the COVID-19 pandemic, with digitalization, capital, etc.
Here are some Indian startups that are helping SMEs get easy loans to scale their business amid the pandemic.
Founded in 2019 by Raghunath Subramanian, Raghu Venkat and Ramkumar Thirumurthi, Enterprise SaaS (Software as a Service) platform based in Bengaluruoffers a Buy Now Pay Later (BNPL) function to MSMEs for B2B (business-to-business) transactions.
“We pioneered the BNPL B2B space in the closed-loop ecosystem comprising enterprises, SMEs and financial institutions. With artificial intelligence (AI) as the first citizen, the Actyv.ai platform enables seamless integration fast and efficient, comprehensive health assessment and SME rating,” said Raghunath Subramanian, Global CEO of Actyv.ai.
The startup enables financial institutions like Axis Bank, Kotak Mahindra Bank, ICICI Bank, HDFC Bank and others to provide low-interest unsecured closed-loop credit (BNPL for B2B) to SMEs based on this score.
Back in February Actyv.ai has raised a pre-Series A round worth $5 million of the Dubai-based investment management company 1Digi – Raghunath Subramanian’s family office to expand and scale the startup globally.
Launched in 2014 by Krishnan Parameshwaran, Gaurav Anand and Lucas Bianchi, based in Bengaluruis an online lending platform that combines a lending marketplace with an AI-based credit underwriting engine to help banks and NBFCs lend to SMEs, democratizing access to credit for small businesses .
The startup offers a hassle-free process by scanning scanned images, retrieving documents through ML-based analysis, OCR technology, triangulating all details, preparing reports, checking eligibility against different products , respecting the format and mapping of rule-based policies.
“Lenders have access to our proprietary Intelligent Credit Reporting Model (iCAM), which helps assess borrower creditworthiness, identify and minimize fraud, and reduce turnaround time by one to six weeks to a few days”, said Gaurav.
He added: “We are working to make financial information easily accessible, although his agreement relies on financial institutions to process requests easily. We are also focusing on many ML and data-driven approaches to grow further and deliver quality results to existing and potential customers,” he added.
In April 2018, the startup raised $3.8 million in a Series A round led by Nexus Venture Partners to expand its global footprint, technology and data analytics platform, and scale its business.
Delhi-based fintech lending startupoffers a variety of small and medium enterprise (SME) loans and personal loans especially in Pune, Mumbai, Rajasthan, Bengaluru and Delhi-NCR.
Launched in 2016 by Geeta Goswami, Anoop Garg and Rajesh Gupta, the startup operates under the trade name of Usha Financial Services. It provides loans of between Rs 15,000 and Rs 50,000 for MSMEs, and Rs 50,000 and Rs 5 lakh for SMEs.
In 2019, the startup raised $2.3 million debt financing to facilitate more lending to MSMEs, SMEs and individuals.
Founded in 2007 by Rohit Arora, Ramit Arora and Vineet Tyagi (CTO), digital lending platform based in New York and Noidais an API-driven digital loan processing and activation platform.
The startup helps banks streamline their lending processes, including authentication and document management, by providing proprietary technology that helps make quick credit decisions and disburse loans in days, instead of weeks and months.
“Particularly in the SME lending space, we realized there was capital to lend, and so was demand. However, banks do not fully understand SMEs, especially when it comes to dealing with their financial statements and solvency. We are leveraging technology to help banks make their loan processing more efficient and allow them to make smarter loans,” vinet said Your story.
Founded in 2018 by Aditya Damaniconsumer lending fintech start-upoffers zero percent business and personal loan solutions or low cost unsecured loans.
It facilitates niche segments, including home furnishings, electric vehicles, education and elective healthcare, alongside conventional lending products.
The average ticket size ranges from $150-25,000 and term of three months to three years.
The startup has more 1,000 tradersincluding brands such as upGrad, Nova IVF, Design Cafe, Asian Paints, Arrivae, Hero Electric, Ampere by Greave, etc.
“Our business aims to financially empower Indians in remote areas or those with no credit score, who have traditionally made up some of the least banked and underserved segments of the country. To this end, we are extending credit to key sectors crucial to improving India’s social infrastructure,” said Aditya.
In 2021, the startup raised $15 million through a mix of equity and debt as part of its round led by angel investors including Alok Agarwal and Anand Ladsariya to expand into Tier II and Tier III cities to expand its assets under management (AUM), improve underwriting models and increase its technical team.