How Fintech Can Drive The MSME Sector Faster?


These days due to the rapid progression in the MSME, the financial sector has improved up to a greater extent. Advancement in technology and digitalization always plays a crucial role in development in any business. 

Fintech is the primary source in the financial sectors responsible for the growth of any business. Because of this the transaction and the business loan process has become more comfortable. Now you do not have to wait so long waiting for the banks or NBFCs to provide MSME loan. In the FinTech platform, one can apply for a business loan.

What is FinTech?

Financial technology is the advanced cash transaction system or loan applications by using the latest available technologies. Several years back bank lenders were the only medium for the approval of any shop loan or business loan. The process was lengthy and took a lot of time. 

The business was also not getting the company’s required amount of capital. But in Fintech, there is no requirement of any eligibility criteria, the loans approved immediately as per the CIBIL score and provide a collateral-free business loan.

The Process That Helps MSME to Get Benefits Through Fintech

Initiation of Finance

Providing MSME loans to small Industries is the utmost importance of Fintech companies. At Fintech credits a business loan made available easily without any collaterals to the emerging industries. This credit will help small ventures boost the business procedure as per FinTech companies’ calculation, providing almost 75% of loan credits for small and medium companies.

As loan approval is more straightforward and approved, quickly small industries can apply for MSME loans at an affordable interest rate. The entire loan approval process generally operated digitally, so it is hassle-free. Moreover, CGTMSE provides credit guarantee to financial institutions that helps provide loans to MSMEs. CGTMSE provides an assurance to the lending institutions up to a mentioned limit for the lending done by them to the MSME sector.

Process of Automation

For doing any startup, every business needs some sorts of initial funds. If these small industries cannot get the required amount of MSME loan, they cannot perform well in the competitive market. Fintech companies are mainly dedicated to providing the necessary amount of loans at the right time to small ventures. The process is fast, trustworthy, and safe for the transaction. It operates entirely digitally by using the latest available technology, so there will not be any business loan approval delay.

Measure Operating Cost

Small industries usually face financial problems during the initial stage of the business. As the money supply is not huge, it gets divided for various purposes. For performing daily activities, the organization needs some sorts of financial balance. 

Applying for MSME loans from FinTech companies will provide that financial stability to the small enterprises. If a small industry is taking some loan, they do not have to pay the initial some days. After the company’s strength and proper running, the same venture can clear the loan amount with significantly fewer interest rates.

Utility Service

Apart from easy loan approval, Fintech Companies are determined to provide utility service to the small industries to enhance their net productivity. Fintech will assist in service like trade service, wealth management, credit analysis, stock assessment etc.

The Indian Industrial, mainly the MSME sectors, are improving rapidly after digitalization. The loan process has become more comfortable. Fintech companies’ arrival in the market place is just working like magic for small and medium industries. As it is a providing timely and business loans with low-interest rates directly or indirectly, contributing to GDP.

Frequently Asked Questions:

How can one take loans from Fintech lenders?

These days, it’s straightforward to take CGTMSE loans from any institution. Well, you can take loans instantly from Fintech lenders just by filling one online. It will take a maximum of 10-15 minutes, and loans will be approved immediately.

What are the activities done in Fintech?

In Fintech, advanced technologies are followed. Some of the activities include using a digital wallet during the transaction process and transferring money on the smartphone using banking Applications.

Why is Fintech regarded as the future?

As Fintech uses AI and blockchain systems, it is more secure. The transaction process, as well as the business loans, are done instantly. The cash flow also improved, so it is regarded as the future.

What is the role of MSME in the Indian economy?

Small and medium enterprises are vital to the Indian economic system. It contributes about 30 percent of the GDP. Providing MSME loans to the emerging industries will help boost the development of the enterprise and the GDP.


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