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New digital lending platform for MSMEs

New digital lending platform for MSMEs

The new digital lending platform for MSMEs boasts a range of features designed to streamline the application and approval process. A key element is its sophisticated credit scoring algorithm, which leverages both traditional financial data and alternative data sources to build a comprehensive picture of an MSME’s creditworthiness. This allows for a more nuanced assessment than traditional methods, potentially unlocking access to credit for businesses that may have been overlooked previously. The platform incorporates a user-friendly interface, accessible via both web and mobile applications, making it convenient for MSMEs to apply for small business loans regardless of their technological proficiency. This ease of use is further enhanced by integrated support features, including FAQs, tutorials and direct contact with customer service representatives.

Furthermore, the platform facilitates a rapid turnaround time for loan applications. Automated processes and real-time data analysis significantly reduce processing time, enabling quicker access to much-needed capital. The platform also integrates seamlessly with various data sources, including the MSME’s digital footprint, allowing for a more holistic view of their financial health. This holistic approach, combined with the platform’s robust security measures, ensures both efficiency and safety throughout the borrowing process. It aims to minimise the paperwork typically associated with MSME lending, making the process significantly less burdensome for applicants.

Another notable feature is the platform’s capacity for personalised loan offerings. Based on the credit scoring and the specific needs of the MSME, the platform can suggest tailored loan products, including different repayment schedules and interest rates. This level of customisation ensures that MSMEs receive financing solutions that are perfectly aligned with their individual circumstances. The platform also provides access to valuable financial management tools and resources, empowering MSMEs to improve their financial literacy and strengthen their long-term financial health. This holistic approach goes beyond simply providing access to credit; it aims to foster sustainable growth and financial stability within the MSME sector. The integration with various fintech solutions further enhances the platform’s functionality and efficiency.
Target Market and Benefits
The primary target market for this new digital lending platform is micro, small, and medium-sized enterprises (MSMEs) across the country. These businesses, often the backbone of the national economy, frequently face challenges accessing traditional sources of finance due to stringent requirements and lengthy application processes. This platform directly addresses these issues, offering a streamlined and accessible alternative lending solution. The benefits are numerous and extend beyond simply providing access to small business loans.

One key benefit is the increased speed and efficiency of the loan application process. The automated system and real-time data analysis significantly reduce processing times, allowing MSMEs to receive funding much faster than through traditional MSME lending channels. This rapid turnaround is crucial for businesses needing quick access to capital for operational expenses, expansion, or emergency situations. The platform’s user-friendly interface further simplifies the process, making it accessible to MSMEs with varying levels of technological expertise. This ease of access is particularly beneficial for smaller businesses that may lack dedicated financial staff.

Furthermore, the platform offers a more inclusive approach to credit scoring. By utilising both traditional financial data and alternative data sources, such as the MSME’s digital footprint and online business activity, the platform can provide a more comprehensive assessment of creditworthiness. This helps to overcome the limitations of traditional credit scoring models, which may overlook businesses with limited credit history but strong potential. This inclusive approach opens up access to finance for a wider range of MSMEs, fostering economic growth and supporting entrepreneurship. The integration of fintech solutions further enhances the platform’s ability to assess risk and provide tailored lending options.

Beyond the provision of small business loans, the platform also offers valuable resources to help MSMEs improve their financial management. Access to financial management tools and educational resources empowers businesses to strengthen their financial health and make more informed decisions. This holistic approach to supporting MSMEs fosters sustainable growth and contributes to the long-term stability of the sector. The platform aims to be more than just a lender; it strives to be a valuable partner in the success of MSMEs.
Impact and Future Plans
It was announced in the Union Budget 2024-25 that public sector banks (PSBs) will build their in-house capability to assess MSMEs for credit, instead of relying on external assessment. This shift signifies a significant move towards greater efficiency and control within the MSME lending sector. By developing their own internal credit assessment processes, PSBs can potentially streamline the application process, reduce reliance on third-party vendors, and potentially offer more competitive interest rates. This internal capability building could also lead to a deeper understanding of the specific needs and challenges faced by MSMEs within their respective regions.

The platform’s impact extends beyond simply providing access to small business loans. Its streamlined processes and user-friendly interface are expected to significantly reduce the administrative burden on both MSMEs and the banks themselves. This efficiency gain could translate into lower operational costs and faster turnaround times for loan applications, benefiting both parties involved. The platform’s success will also be measured by its contribution to financial inclusion, ensuring that MSMEs previously excluded from traditional lending channels now have access to much-needed capital. The increased availability of credit could stimulate economic growth and job creation within the MSME sector.

Future plans for the platform include ongoing improvements to its credit scoring algorithm, incorporating advanced analytics and machine learning techniques to further enhance its accuracy and predictive capabilities. Integration with other government initiatives and databases will also be explored, aiming to provide a more holistic view of an MSME’s financial health and business operations. The platform’s developers are also committed to expanding its functionality to include additional financial products and services tailored to the evolving needs of MSMEs. This could involve partnerships with fintech companies to offer a broader range of solutions, from insurance products to business management tools. Continuous monitoring and evaluation of the platform’s performance will ensure its long-term effectiveness and sustainability.

Further development will focus on enhancing the platform’s ability to leverage alternative data sources, such as an MSME’s digital footprint and online business activity, to create a more comprehensive picture of creditworthiness. This will enable the platform to provide more accurate and tailored credit scoring, making alternative lending options more accessible to a wider range of businesses. The platform’s success will be measured not only by the volume of loans disbursed but also by its contribution to the overall growth and stability of the MSME sector. The platform’s developers are committed to fostering a supportive ecosystem that promotes sustainable growth and financial inclusion within the MSME community.

March 7, 2025
BSE SME NAPS Global India IPO Oversubscribed

BSE SME NAPS Global India’s IPO ends with 1.17 times subscription

The BSE SME NAPS Global India IPO received a strong response from investors, closing its subscription period significantly oversubscribed. The final subscription figures revealed a total oversubscription of 1.17 times. This indicates that the demand for shares significantly exceeded the number of shares offered during the IPO. This level of oversubscription reflects positive investor sentiment towards the company and its future prospects. Detailed breakdowns of the subscription across various investor categories – qualified institutional buyers (QIBs), high net worth individuals (HNIs), and retail investors – will be available shortly in the official IPO documentation. The strong response showcases the attractiveness of the IPO to a wide range of investors.

Further analysis will be required to determine the precise allocation of shares to each investor category, given the oversubscription. The high level of demand suggests that the IPO pricing was considered attractive and competitive within the current market conditions. The successful oversubscription of the BSE SME NAPS Global India IPO is a positive sign for the company and could potentially indicate a successful listing on the stock exchange. It will be interesting to see how the share price performs following its official listing.
Investor Interest
The significant oversubscription of the BSE SME NAPS Global India IPO, reaching 1.17 times, highlights considerable investor confidence in the company’s potential. Several factors likely contributed to this strong interest. The company’s business model, its track record, and its growth prospects in the burgeoning Indian market probably all played a role in attracting investors. Furthermore, the IPO pricing was likely perceived as attractive, representing good value for money compared to similar offerings.

The participation of a diverse range of investors, including qualified institutional buyers (QIBs), high-net-worth individuals (HNIs), and retail investors, demonstrates a broad-based belief in the company’s future. This suggests that the IPO’s marketing and investor relations efforts were effective in communicating the company’s value proposition to a wide audience. The level of retail investor participation is particularly noteworthy, indicating strong interest from the general public.

Media coverage and analyst reports leading up to the IPO likely also influenced investor sentiment. Positive assessments of the company’s fundamentals and growth potential could have encouraged greater participation. The overall market conditions at the time of the IPO, including prevailing interest rates and investor risk appetite, also played a part in determining the level of investor interest. The strong response to the BSE SME NAPS Global India IPO underscores the potential for growth in the Indian SME sector.
Future Outlook
The successful 1.17 times oversubscription of the BSE SME NAPS Global India IPO bodes well for the company’s future. A strong listing on the stock exchange is anticipated, potentially leading to increased brand recognition and market share. The high demand demonstrated by investors could translate into a robust share price performance post-listing, although market volatility remains a factor. The company will need to effectively manage its growth and meet investor expectations to sustain this positive momentum.

Access to capital raised through the IPO will allow BSE SME NAPS Global India to pursue strategic initiatives, such as expansion into new markets, investment in research and development, and potential acquisitions. This infusion of capital could significantly accelerate the company’s growth trajectory and strengthen its competitive position within the industry. Successful execution of these plans will be crucial in justifying the high level of investor confidence demonstrated during the IPO.

However, the company faces challenges inherent in the competitive Indian market. Maintaining its growth momentum while managing operational efficiency and navigating regulatory hurdles will be key to long-term success. The company’s ability to adapt to changing market conditions and maintain its strong financial performance will be crucial in sustaining investor confidence beyond the initial listing euphoria. Continued transparent communication with investors will be vital in building and maintaining trust.

The long-term outlook for BSE SME NAPS Global India will depend on several factors, including macroeconomic conditions in India, the company’s ability to execute its business plan, and its capacity to adapt to evolving market dynamics. Regular monitoring of key performance indicators and proactive management of risks will be essential to navigate the complexities of the market and deliver on the promises made during the IPO. The successful oversubscription provides a strong foundation, but sustained success requires consistent performance and strategic execution.

March 7, 2025
Over 25% of Micro and Small Enterprises in Northeast Struggling to Survive: Study
Over 25% of Micro and Small Enterprises in Northeast Struggling to Survive: Study
A recent study by the MSME Export Promotion Council (EPC) revealed that over 25% of micro and small enterprises (MSEs) in India’s Northeastern states are grappling with severe survival challenges. The region, home to approximately 74,000 MSMEs, faces multiple crises stemming from lack of affordable finance, rapid technological changes, and inadequate infrastructure.
While releasing the report in New Delhi, Dr. D.S. Rawat, Chairman of MSME EPC, highlighted that although startups in the region have helped generate employment, many remain in crisis due to insufficient support from larger units or institutions.
To address these issues, the EPC proposed a five-point strategy for reviving the struggling MSEs and fostering new startups. Key recommendations include:
State Government Intervention: Establish high-powered committees to prioritize and address the challenges faced by MSMEs in the region.
Conducive Environment: Develop a roadmap focused on skill development, MSME product showrooms, and stronger connections with R&D centers and global marketing agencies.
New Financing Model: Collaborate with the DoNER Ministry, multilateral institutions, and private players to create a more attractive investment environment and encourage entrepreneurship.
Single Window System: Introduce a ‘Single Window’ system to simplify processes for MSMEs and encourage private investment.
Private Sector Engagement: Foster collaborations with innovative companies and institutions, while encouraging private-sector funding through debt instruments with tax incentives.
The study also identified key challenges such as geographical barriers, underdeveloped transport systems, and low private-sector participation. It recommended building networks of development service providers to offer tailored solutions in technology, product development, and marketing, helping MSMEs navigate the difficult landscape.
September 27, 2024
Digital Competition Bill Could Undermine MSME Ecosystem, Say Small and Medium Businesses

Digital Competition Bill Could Undermine MSME Ecosystem, Say Small and Medium Businesses

Members of the India SME Forum, the largest association of SMEs in the country, expressed concerns that the Digital Competition Bill (DCB) could adversely affect the MSME ecosystem and hinder India’s Viksit Bharat goals.
The industry body, representing small and medium enterprises (SMEs), warned on August 7 that the DCB could deter foreign direct investment (FDI) and limit the global competitiveness of MSMEs.
The Indian SME Forum hosted a roundtable in New Delhi to discuss the potential implications of the DCB on MSMEs and startups. The draft of the DCB, which was released in February, aims to address anti-competitive practices by Big Tech. However, it has faced widespread criticism from Indian businesses and startups, who argue that the bill could negatively impact their operations.
Vinod Kumar, President of the India SME Forum (ISF), emphasized during the roundtable that India has a unique opportunity to benefit from companies moving out of China. “Any regulation like the DCB could become a stumbling block in attracting FDI and promoting the global competitiveness of MSMEs,” Kumar stated.
Kumar also highlighted MSMEs’ concerns over the proposed ex-ante regulations—measures introduced in anticipation of certain impacts—especially those related to the use of personal data.
Aditi Madan, founder of Blue Pine Foods, stressed the importance of ensuring that SMEs have access to relevant information in the digital market economy. “Policy priorities should focus on directly engaging with SMEs during the creation process to ensure their needs and perspectives are adequately addressed,” she said.
Debashish Das, CEO of ElenchusHR Solutions, warned that overly stringent regulations could push businesses back to manual processes “reminiscent of the 70s and 80s,” hindering progress.
Amit Agrawal, founder of DSI Robotics, echoed these concerns, stating, “The Digital Competition Bill presents a safety paradox and could impose an undue compliance burden on small businesses, as has happened in the past.”

August 9, 2024
NSE Partners with Defence Ministry to Facilitate MSME Capital Access

NSE Partners with Defence Ministry to Facilitate MSME Capital Access

The National Stock Exchange (NSE) has partnered with the Defence Ministry to provide capital market access to MSMEs in the defence sector through its NSE Emerge platform.
New Delhi, Jul 29 (PTI) – The National Stock Exchange (NSE) announced on Monday that it has signed a memorandum of understanding (MoU) with the Ministry of Defence to facilitate capital market access for micro, small, and medium enterprises (MSMEs) in the defence sector.
The MoU aims to help MSMEs in the defence sector raise productive capital for their growth plans efficiently and transparently through the NSE Emerge platform. This platform offers new and viable options for raising equity capital from a diversified set of investors, according to a statement from the exchange.
The MoU will be in effect for five years. During this period, the Department of Defence Production (DDP) and NSE will conduct extensive awareness drives through seminars, MSME camps, knowledge sessions, roadshows, and workshops to guide corporates engaged with the Ministry of Defence on fundraising via the NSE Emerge platform.
Additionally, NSE will assist MSMEs in connecting with intermediaries such as merchant bankers, registrars, transfer agents, and depositories. The exchange will also guide them regarding the capital markets, capital-raising mechanisms, regulatory compliance, and requirements.
The MoU was signed by the Additional Secretary of the Department of Defence Production (DDP) and the Managing Director of NSE in the presence of Defence Secretary Giridhar Aramane.
This partnership aims to help MSMEs and emerging companies in the defence sector scale up their business operations, explore new markets, and fund their R&D activities.

July 30, 2024
How MSMEs Can Boost India’s Real Estate Market

How MSMEs Can Boost India’s Real Estate Market

With streamlined regulations and increased credit access, MSMEs have the potential to significantly enhance India’s real estate sector. MSMEs play a pivotal role in innovation, employment, and economic growth, contributing over 30% to India’s GDP. This sector is poised to transform India’s economic landscape further.
A report indicates that over 140 million people are currently employed in the MSME sector. Experts predict that the sector’s worth will reach one trillion dollars by 2028, representing a vast market with numerous possibilities. Given these positive statistics, attention is now focused on how MSMEs will reshape the real estate market and their substantial potential.
Role of MSMEs in the Real Estate Sector
Construction firms, contractors, consultants, and suppliers are integral parts of MSMEs. The construction sector contributes about 8% of India’s GDP and is projected to become the third-largest in the coming years. Many firms in this sector are unorganized, presenting an opportunity for official MSME registration. Despite global economic challenges and inflation, the real estate sector has shown resilience, and MSMEs have played a significant role in this growth.
Trends in the MSME Sector in India
Real estate MSMEs benefit from low-interest rates, exemptions on electricity consumption, and zero-collateral loans. Maintaining a track record of timely project execution, effective cash flow management, and formal documentation is crucial for these firms. While established developers secure finances from commercial banks and private equity, small developers often face challenges in obtaining project funding. Upgrading MSME infrastructure and digitalizing operations will be critical for the sector’s development.
The construction sector can also benefit from MSME registration, allowing firms to supply goods and services to large-scale companies involved in construction. The 2023-2024 Union Budget increased the infrastructure budget by 33%, recognizing infrastructure as a key factor for sustainable growth. MSMEs can support large construction firms and access suppliers of essential building materials.
Registering as MSMEs: For Real Estate
MSME registration allows developers to access credit from financial institutions and banks without pledging assets as security. Registered developers can benefit from reduced interest rates and free ISO certification, providing financial aid for obtaining certification. Registered MSMEs can also protect their innovations with a 50% subsidy on registration costs.
Significance of MSMEs
MSMEs are agile and cater to the needs of India’s middle class. Their flexibility and adaptability are commendable, as they often work based on client preferences, fostering personal connections. MSMEs are one of the largest employers outside the rural domain, employing over 40% of workers with low technology and capital requirements. They support capacity building and resource mobilization, allowing small business owners to develop innovative products. Multinational companies depend on these firms for auxiliary and semi-finished products, making MSMEs crucial to creating a suitable and inclusive society.
Future Outlook: MSMEs and Real Estate
Lending to MSMEs in real estate is expected to increase, with more private firms expanding their exposure to this sector. Financial companies using AI-powered credit scoring and predictive analysis will modernize the lending landscape, benefiting construction companies by scaling up their projects. Upgrading MSME infrastructure, including project-specific incentives like power consumption rebates and land cost discounts, will provide strong incentives for developers.
The proposal for a 75,000 crore investment in transport infrastructure projects in India will benefit MSMEs in the manufacturing space. Incentives for setting up skill development centers and business mentoring services for compliance with RERA in the real estate sector will promote professionalism among small developers. Real estate MSMEs will also benefit from various policy incentives announced by the State and Central Governments of India.
With streamlined regulations and increased credit access, MSMEs can drive economic growth and prosperity in India. Government support for MSMEs and focused initiatives will be crucial in realizing these outcomes. The real estate sector is set for a revolution powered by MSMEs.

June 26, 2024
Government Considering New Bank to Bridge Credit Gap for MSMEs

Government Considering New Bank to Bridge Credit Gap for MSMEs

The government is contemplating the establishment of a dedicated bank to provide direct lending to micro, small, and medium enterprises (MSMEs). This initiative aims to enhance credit flow to the under-served sector, thereby boosting economic activity and job creation.
Current Scenario and Challenges
Presently, the Small Industries Development Bank of India (SIDBI) primarily provides refinancing to banks that lend to MSMEs, which helps reduce financing costs for these units. Additionally, state financial corporations and state industrial development corporations lend directly to MSMEs.
Despite these efforts, MSME credit penetration in India remains at 14%, significantly lower than 50% in the US and 37% in China, according to an EY report. The Indian MSME sector faces a credit gap of Rs 25 trillion, indicating a vast untapped market.
Proposal Details
“There is a need to set up a separate bank for the MSME sector to address direct credit shortages,” an official said, noting that the proposal is under consideration. The government is expected to decide on this proposal at an appropriate time. The bank’s ownership structure might include a hybrid public-private partnership model.
Financial Context
Adequate, timely, and low-cost finance is crucial for MSMEs’ growth into larger enterprises. As of December 2023, outstanding credit to MSMEs by scheduled commercial banks had grown by 20.9% annually, reaching Rs 26 trillion.
Significance of MSMEs
MSMEs, numbering 64 million, are vital to the Indian economy. They provide over 110 million jobs, accounting for 23% of the labor force, making them the second-largest employer after agriculture. MSMEs contribute 27% to India’s GDP, 38.4% to the total manufacturing output, and 45% to the country’s total exports.
Industry Insights
“A separate bank that understands the needs and workings of MSMEs is required,” said Sandip Kishore Jain, President of the Federation of Indian Micro and Small & Medium Enterprises. He emphasized that large banks often do not grasp the unique requirements of MSMEs. In some European countries, MSMEs are grouped with home loan customers due to their small borrower status.
Vijay G Kalantri, President of the All India Association of Industries, suggested converting SIDBI into a full-fledged bank for direct MSME lending if establishing a new bank is not feasible. He also advocated for MSMEs to receive loans at housing interest rates, i.e., 6% for exports and 8% for domestic production, compared to the current rates of 11-13% for MSMEs and 8-9% for exports.
SIDBI Overview
Established under an Act of Parliament in 1990, SIDBI’s majority shareholders include the Government of India (20.85%), State Bank of India (15.65%), Life Insurance Corporation of India (13.33%), and the National Bank for Agriculture and Rural Development (9.36%).
SIDBI benefits from low-cost funds available from banks against their shortfalls in meeting priority sector lending (PSL) targets. For FY24, the MSE Refinance allocation was Rs 84,000 crore. However, SIDBI’s growth prospects are tied to the PSL target coverage achieved by scheduled commercial banks. As these banks progressively meet higher PSL targets, the overall allocation under MSE funds could decrease, affecting SIDBI’s long-term growth prospects, according to an ICRA report.

June 24, 2024
CRISIL SME Tracker: Higher demand, PLI to propel electronics MSMEs in FY25

CRISIL SME Tracker: Higher demand, PLI to propel electronics MSMEs in FY25

Various factors contributed to the growth, such as increasing penetration of internet and 5G services, rising consumer income, shorter replacement cycles, easier payment terms
Domestic consumption of electronics items is estimated to have grown 13-15 per cent to Rs 14-15 trillion in the financial year ended March 31, 2024 (FY24), with mobile phones and consumer and industrial electronics accounting for 50-55 per cent of the pie.
Various factors contributed to the growth, such as increasing penetration of internet and 5G services, rising consumer income, shorter replacement cycles, easier payment terms, and developments in the auto, electric vehicle, and power segments.
In FY25, overall electronics consumption growth is expected to moderate to 10-12 per cent as inflation marginally affects sales of mobile phones and consumer durables, which account for 40 per cent of electronics consumption in the country.
Electronics production, however, is expected to grow 15-20 per cent, largely owing to the production-linked incentive scheme (PLI) that is encouraging manufacturing of mobile phones, white goods, information technology hardware, and solar photovoltaic cells and modules.
That augurs well for the micro, small and medium enterprises (MSMEs) that produce electronics components and assemble consumer and industrial electronics products.
The MSME units account for 25-35 per cent of the industry’s consumption of components. These units are expected to log a revenue growth of 11-13 per cent year-on-year (Y-o-Y) in FY25, driven by mobile phones, consumer and industrial electronics, computer hardware, and strategic electronics.
As for margins, following a range-bound performance in FY24, the MSMEs are expected to experience a slight contraction of up to 30 basis points in FY25, primarily because of commodity prices.

May 29, 2024
“MSME Delayed Payments: Updated Online Procedure for Filing Applications Against Defaulting Buyers”

MSME Delayed Payments: Updated Online Procedure for Filing Applications Against Defaulting Buyers

In response to delayed payments from buyers, MSMEs in India often encounter significant challenges. According to the government’s delayed payment monitoring portal, MSME Samadhaan, since October 2017, approximately 1.89 lakh applications involving Rs 43,160 crore have been filed by MSMEs. However, only 36,074 cases totaling Rs 6,235 crore have been resolved by facilitation councils.
For those seeking to file an application online against a buyer who has not settled dues within 45 days of invoice generation, follow these step-by-step instructions:
1. Visit the delayed payment filing and monitoring portal by the MSME ministry at samadhaan.msme.gov.in.
2. Click on the ‘Case Filing for Entrepreneur/MSE Units’ tab.
3. Choose the type of MSME registration — Udyog Aadhaar Number or Udyam Registration Number.
4. Enter the registration number, mobile number (as per the registration certificate), and verification code.
5. Click on ‘Validate Udyog Aadhaar’ or ‘Validate Udyam Registration’ based on your registration type.
6. Enter the OTP sent to the registered mobile number or email address for verification.
7. Access the ‘Application List’ page and click on ‘Application Entry’ located at the top right corner.
8. Input the date of the pending invoice under ‘The date of invoice in dispute’ and click ‘Submit.’
9. Your details will be pre-filled under ‘Petitioner Details’; provide any additional required information.
10. Select the business location from where the dispute has arisen.
11. Opt to send the application to the facilitation council of the state where your corporate office is located (‘Yes’).
12. Enter your office PAN and NIC code of the product sold.
13. Confirm the declaration at the end of the form.
14. Provide buyer or respondent details, including the GST number, and acknowledge the consent statement.
15. Specify the amount owed by the buyer.
16. Enter work order and invoice specifics and upload necessary documents.
17. Validate the information submitted, enter the verification code, and click ‘Final Submit.’
Both you and the buyer will receive notifications upon successful submission of the complaint.

May 14, 2024
How Lenders Navigate Risk in MSME Lending Without Credit History

How Lenders Navigate Risk in MSME Lending Without Credit History

Lending to small and unorganised businesses presents significant credit risk, primarily due to the absence of credit history for assessment. Traditional methods of credit evaluation, such as predicting behavior based on credit history or analyzing cash flows and profitability through financial statements, often fall short in this scenario.
Shikhar Aggarwal, Chairman of BLS E-Services, underscores the importance of identifying and mitigating risks like credit default and market volatility. This approach not only ensures the stability of loan portfolios and minimizes losses but also promotes responsible lending practices. Aggarwal emphasizes that proactive risk management is crucial for MSMEs to demonstrate financial reliability and business acumen, essential for securing funding, growth, and operational success. Moreover, a robust risk management framework builds trust with financial institutions, improving loan terms and access to larger credit facilities, enabling MSMEs to innovate, expand, and navigate economic challenges effectively.
Ujual George, COO of Aye Finance, explains how his company overcame this challenge by developing a tailored underwriting model based on data science and a comprehensive physical presence. Aye Finance’s extensive workforce of 6,000 across 450+ branches nationwide plays a critical role in managing credit risk effectively through this “phygital” (physical + digital) model.
Aggarwal further elaborates on the multifaceted approach NBFCs use to manage risks during lending. This includes assessing liquidity profiles with seasonally adjusted fund utilization patterns, evaluating company profiles based on ownership, industry segment, location, and maturity level, analyzing repayment behavior and asset classification, determining creditworthiness through outstanding debt and credit scores, assessing collateral for secured credit, and considering external factors like economic conditions, business trends, and potential legislative changes that may impact MSMEs.

May 8, 2024