These fintech startups help empower MSMEs to avail of easy loans

The micro, small, and medium enterprises (MSME) sector is considered the backbone of the Indian economy. According to India Brand Equity Foundation (IBEF), India is home to about 6.3 crore MSMEs, which contribute around 29 percent to the country’s overall GDP.

MSMEs generate significant employment opportunities and provide a livelihood for people in semi-urban and rural areas. 

In fact, the Indian government has launched schemes — including Prime Minister Employment Generation Programme (PMEGP), the Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE), Digital MSMEs, etc — to enhance the sector to receive more capital to scale their businesses. 

Besides, the Indian startup ecosystem has come forward to help small and medium businesses (SMBs), especially amidst the COVID-19 pandemic, with digitisation, capital, etc.

Here are a few Indian startups helping SMBs avail of easy loans to scale their business amidst the pandemic. 

Actyv.ai

Founded in 2019 by Raghunath Subramanian, Raghu Venkat, and Ramkumar Thirumurthi, Bengaluru-based SaaS (software-as-a-service) enterprise platform Actyv.ai offers a Buy Now Pay Later (BNPL) feature to MSMEs for B2B (business-to-business) transactions.

“We have pioneered the B2B BNPL space in the closed-loop ecosystem comprising enterprises, SMBs, and financial institutions. With artificial intelligence (AI) as the first citizen, the Actyv.ai platform enables quick and efficient onboarding, comprehensive health assessment, and scoring of SMBs," said Raghunath Subramanian, Global CEO, Actyv.ai.

The startup allows financial institutions like Axis Bank, Kotak Mahindra Bank, ICICI Bank, HDFC Bank, and others to provide unsecured, low-interest, closed-loop credit (BNPL for B2B) for SMBs based on this score.

Back in February, Actyv.ai raised a Pre-Series A round worth $5 million from Dubai-based investment management firm 1Digi — the family office of Raghunath Subramanian to expand and scale the startup globally.

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Namaste Credit

Started in 2014 by Krishnan Parameshwaran, Gaurav Anand, and Lucas Bianchi, Bengaluru-based Namaste Credit is an online lending platform that combines a loan marketplace with an AI-based credit underwriting engine to help banks and NBFCs lend to SMEs, democratising credit access for small businesses.

The startup offers a hassle-free process by digitising scanned images, fetching documents through ML-driven analysing, OCR technology, triangulating all details, preparing reports, checking eligibility against different products, format-agnostic, and rules-driven policy matchmaking.

“Lenders get access to our proprietary intelligent credit assessment model (iCAM), which helps assess the creditworthiness of borrowers, identify and minimise fraud, and reduce turnaround time from one to six weeks to a few days,” Gaurav said.

He added, “We are working to make financial information easily available, even if its agreement is based on financial institutions to easily process the requests. We are additionally focusing on a lot of 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 businesses.

Cash Suvidha

Delhi-based fintech lending startup Cash Suvidha offers a variety of loans to small and medium businesses (SMBs) and personal loans, especially in Pune, Mumbai, Rajasthan, Bengaluru, and Delhi-NCR. 

Started in 2016 by Geeta Goswami, Anoop Garg, and Rajesh Gupta, the startup functions under the trade name of Usha Financial Services. It provides loans with a ticket size between Rs 15,000 and Rs 50,000 for MSMEs, and Rs 50,000 and Rs 5 lakh for SMEs.

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In 2019, the startup raised $2.3 million in debt funding to facilitate further lending to MSMEs, SMEs, and individuals.

Biz2X

Founded in 2007 by Rohit Arora, Ramit Arora, and Vineet Tyagi (CTO), New York and Noida-based digital lending platform Biz2X is an API-driven digital loan processing and enabling platform.

The startup assists banks streamline their lending processes, including authentication and paperwork management, by providing proprietary technology that helps make fast credit decisions and disburses loans within days, instead of weeks and months.

“Particularly in the SME lending sector, we realised there is capital to lend as is the demand. However, banks don’t understand SMEs fully, especially when it comes to processing their financial statements and creditworthiness. We leverage tech to help banks make their loan processing more efficient and enable them to give out smarter loans,” Vineet told YourStory.

Credit Fair

Founded in 2018 by Aditya Damani, consumer-lending fintech startup Credit Fair offers lending solutions to both businesses and private individuals at zero percent or low-cost unsecured loans. 

It facilitates niche segments, including home furniture, electric vehicles, education, and elective healthcare treatment, alongside conventional lending products.

The average ticket size ranges from $150-25,000 and tenure from three months to three years. 

The startup has over 1,000 merchants, including brands such as upGrad, Nova IVF, Design Cafe, Asian Paints, Arrivae, Hero Electric, Ampere by Greave, etc.

“Our venture aims to financially empower Indians from remote areas or those without a credit score, who traditionally comprise some of the most unbanked and underserved segments across the country. To this end, we are extending credit across key sectors crucial for 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 seed round led by angels investors, including Alok Agarwal and Anand Ladsariya, to expand into Tier-II and III cities to scale its Assets Under Management (AUM), enhanced underwriting models, and augment its technology team.