The MSME sector ( Micro, Small, and Medium enterprises) plays a vital role in the growth and contribution of the developing economy, and the number of MSMEs in India has increased by a CAGR of 18% from 2019 to 2020, India’s MSME sector is estimated to comprise some 63 million firms, and providing employment to 11.1 million workers also MSMEs are contributing about 30% country’s Gross Domestic Product to the economy. A micro-enterprise of today will be a big enterprise of tomorrow, and might well become a multinational enterprise eventually.
There are more than 63 million MSME companies in India and 99% of them are still micro due to the lack of finance, even though this sector employs an estimated 59.7 million persons. About half of MSMEs don’t have access to formal credit. MSMEs are less likely to obtain loans from banks instead they rely on internal funds or cash from friends and family to launch and run their enterprise, But there are lots of fintech companies helping these MSMEs to get better access to credit to empower them for financial inclusion and growth. FinTechs help them by fulfilling their financial needs, including securing working capital, hedging foreign exchange risk, and managing cash flow.
Here are five fintech companies empowering MSMEs for Financial Inclusion and Growth
1- Crediwatch – An AI/ML-powered startup that operates in the space of business analytics, credit risk intelligence, and insights on businesses, is driven by its mission to solve financial inclusion of MSMEs, remove barriers to trade and credit and build trust and transparency in business and has done the same for supporting the growth of this sector.
2- ShakeDeal: A digital-first supply chain and B2B commerce platform, ShakeDeal is a marketplace that offers industrial supplies, office supplies, corporate gifting, and more. Currently associated with over 10,000 SMEs and over 200 large enterprises, ShakeDeal engages with the MSMEs, providing them a platform to both sells and buy as well as helping them by providing a supply chain financing tool for their expense management.
3- SmartCoin – SmartCoin Financials is India’s first fully-automated next-gen Fintech company aiming to address the credit requirements of innumerous self-employed micro-entrepreneurs, and micro-merchants, and middle/lower-income salaried individuals by leveraging advanced data science and Machine Language algorithms. The platform intends to serve the hitherto under-served customers through a comprehensive digital interface across India.
4- Cashinvoice: Cash flow management is a time-consuming activity for corporations that is often manual and prone to human errors. Keeping time efficiency and reduction of human labor, it is wise to automate these processes using platforms like Cashinvoice. These processes of payables or receivables are critical, the time, effort, and resources spent performing these functions are a significant profit drain to any business.
5- Algo360: Algo360 is an emerging alternative credit score solution that provides lenders 800+ alternate data points to gauge the creditworthiness of MSMEs who usually have any credit score to present to banks. Less than 20% of MSMEs have access to formal credit amid an estimated MSME debt demand of INR 70 trillion or INR 70 lakh crore.
