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Banks, NBFCs or maybe fintechs. Who is in a better position to plug the $240 billion credit gap for MSMEs?

Banks, NBFCs or maybe fintechs. Who is in a better position to plug the $240 billion credit gap for MSMEs?

Synopsis

With technology transforming the lending landscape, are traditional lenders losing sheen and who’s best placed to lend to SMEs?

For 65 million Indian MSMEs that contribute over 45% of the nation’s manufacturing output, a lack of timely and adequate access to funding remains their Achilles’ heel. A report by an IFC-Intellecap in 2019 on unmet credit gap had pegged it at around a massive $240 billion (about Rs 17.40 lakh crore).Given the vulnerabilities faced by small businesses today, the MSME sector’s liquidity needs have witnessed a spike. As MSMEs scramble to raise
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