The Reserve Bank of India (RBI) estimates the total addressable credit demand by the country’s MSMEs at $490 bn and the overall supply from formal sources at $192 bn. “This credit gap of up to $331 billion suggests that traditional lenders are either reluctant or unable to serve this segment of borrowers. Alternative lenders like FlexiLoans, Indifi, SMEcorner and ZipLoan see lending to MSMEs as a business opportunity,” said a latest Forrester report.
These digital lenders offer a wide range of alternative lending options, such as working capital loans from Happy, lines of credit from Indifi, startup loans from Lendingkart, and merchant cash advances from FinBucket. “They use technology such as digital applications, automated underwriting, digital verification, and digital disbursement to improve risk assessment, accelerate loan processing, and enhance experiences,” said Arnav G, Analyst, Forrester Research.