MSME fintechs steal show as consumer lending loses fizz
Digital lenders focused on unsecured small business loans are hogging the limelight as recent regulatory actions and changes in the macroeconomic conditions have made unsecured consumer loans – the mainstay of lending fintechs so far – less attractive, industry officials said.
Players like Indifi, Lendingkart, Aye Finance, Kinara Capital are expected to benefit from the growing influence of digital lenders in MSME (micro, small and medium enterprises) loans, typically dominated by banks and traditional NBFCs, they said.
Elevate Your Tech Prowess with High-Value Skill Courses
Offering CollegeCourseWebsiteIndian School of BusinessISB Product ManagementVisitMITMIT Technology Leadership and InnovationVisitIndian School of BusinessISB Professional Certificate in Product ManagementVisitLarge private sector banks are increasingly opening up to working with these fintechs to tap into the underserved unsecured business credit market, they added.
“Mainstreaming of fintechs in the MSME space is happening… We are increasingly working with the likes of Sidbi (Small Industries Development Bank of India) and other national institutions to help fund small businesses typically not catered to by banks,” said Jatinder Handoo, chief executive officer of industry body Digital Lenders’ Association of India (DLAI).
With the simplification of registration of MSMEs through the government-run Udyam Registration Portal, banks are able to classify these entities easily and bring these loans under priority sector lending, industry insiders
