SMEs are the backbone of the Indian industry with 42 million enterprises contributing to 6.11 per cent of the GDP in manufacturing and 24.63 per cent of the GDP to the service sector. Despite being a significant contributor to the Indian economy, SMEs face greater vulnerability on account of the payment mechanisms which came under greater stress in recent times.
SMEs are facing numerous challenges when it comes to growth due to various issues such as insufficiency of funds, limited resources and high global competition. The tight liquidity situation in the financial markets has only exacerbated the problems faced by the MSMEs.
Seeing a tremendous opportunity, financial platforms are upping the ante in helping small businesses overcome the challenges in business growth. Recently, Standard Chartered bank announced that they will be launching a platform for SMEs in India, to enable them to get access to financial and business solutions.
Entrepreneur India lists 7 fintech startups that are making financial services seamless for small businesses:
Known as Asia’s first neo-banking platform, Open provides business banking solution for SMEs. The startup has become the digital banking platform of choice for over 50,000 SMEs and Start-ups in India. It combines banking, payments and accounting in one unified service, thus allowing SME owners to benefit as they can streamline, automate and run their finance function effectively.
India’s leading NBFC lending to the under-served MSMEs, NeoGrowth offers unsecured loans to merchants who accept cards or other digital payments from customers using its proprietary technology platform. NeoGrowth loans can be availed for a short term in a hassle-free manner with the facility of daily repayment, a unique feature that differentiates its offerings for the customer.
Backed by: Omidyar Networks, Accel Partners and Elevar Equity, Indifi is a platform for enabling debt-financing for small businesses. It aims to substantially improve the experience that borrowers get in terms of speed of approval and disbursement, the convenience of the loan process, relevance of the loan product to their business needs, and finding the best rates in the market. Driven by the passion to bridge the gap in SME financing, Indifi has emerged as an enabler for small businesses to seek seamless access to funding.
The fintech startup is one of India’s leading digital lending platforms offering working capital finance for micro, small and medium enterprises (MSMEs). FlexiLoans has 100 national partnerships and has partnered with e-commerce websites like Flipkart and ShopClues, along with Point of Sale (PoS) payment system providers like PineLabs, lending to their merchant base. The firm offers various products such as Working Capital Loans, Loan against POS transactions, Supply Chain Finance and Line of Credit.
Aye Finance is a commercial institution built around the mission to solve the challenges of funding MSMEs and enabling their inclusion into the mainstream of the economy. The startup differentiates itself by creating a technically enabled process that builds credit insights through a variety of available business and behavioural data. This effective credit appraisal coupled with the use of modern workflow automation and a small but engaged workforce is helping bridge the gap between the MSMEs and organized lending.
One of the fastest growing online marketplaces for SME loans in India, Namaste Credit has partnered with over 60 leading banks and NBFCs. Setup in 2014, the company also offers white labelled fin-tech solutions such as Loan Origination Systems(LOS) and Credit Assessment Memo (CAM) to banks and NBFCs.
India’s first Converged Payments Solution company, Razorpay helps Indian businesses with comprehensive and innovative solutions built over robust technology to address the entire length and breadth of the payment journey for any business. Established in 2014, the company provides tech payment solutions to over 350,000 businesses. Founded by alumni of IIT Roorkee, Shashank Kumar & Harshil Mathur, Razorpay is the second Indian company to be a part of Silicon Valley’s largest tech accelerator, Y Combinator.