Why SMEs Struggle with Business Loans – And How We’re Solving It

India has over 63 million MSMEs, contributing nearly 30% of the GDP and employing 110 million people. Yet, only 16% of them have access to formal credit. The rest depend on moneylenders with high-interest rates.

Key challenges SMEs face:

• Collateral Requirements: 65% of small businesses can’t pledge property or assets.
• Lengthy Processes: Traditional banks take 20–30 days for approvals.
• Credit History Gap: Many SMEs operate with thin credit files, making them "high risk."

How fintech is changing the game:

• Cash Flow–Based Lending: Instead of collateral, lenders analyze GST returns, bank transactions, and UPI flows.
• Faster Approvals: Average turnaround time has dropped to 3–5 days.
• Government Push: Schemes like CGTMSE and Mudra Loans back over ₹4 lakh crore in SME financing annually.

At our platform, we’ve disbursed ₹500+ crore to SMEs in the last 3 years, with a repayment rate of 98%—proving that small businesses are more creditworthy than traditional banks assume.

My advice to entrepreneurs: Keep your financial records clean and digital. Lenders love transparency.