Micro, Small, and Medium Enterprises (MSMEs) have experienced a remarkable growth in the recent years. They play a critical role in boosting India’s economy and significantly impacting global trade. However, timely and adequate access to credit remains a core challenge. And while fintech is accommodating the rise of MSMEs by enabling quick, paper-free access to capital, the lending experience continues to remain saturated with friction.

What: MSME lending platforms

The MSME sector in India has depicted resilience and adaptability in every phase of growth, even during the COVID-19 pandemic. MSMEs contribute to more than 35% of India’s GDP, majorly impacting exports as well as the socio-economic development of the country. Nearly 63 million MSMEs are spread across diverse sectors, including agriculture, manufacturing, services, among many others, and the numbers will continue to increase in the coming years.

The innovation in MSMEs has also increased the global demand of Indian products and services, shaping a promising future for the existing and emerging MSMEs as well as entrepreneurs making their way into the formal economy.

There are several key contributors driving the growth of MSME in India. Along with the government initiatives that provide many forms of support and assistance, the adoption of digital tools and platforms has truly revolutionized MSME operations. This digital transformation solves a key challenge historically faced by MSMEs - access to capital.

The onset of fintech has proved to be significantly beneficial and crucial for MSMEs with quick access to loans, minimal paperwork, collateral-free loans under government initiatives, and vital support to micro enterprises, especially in rural areas.

Why: Challenges faced by MSMEs

A survey from 2018 documented that nearly 32% of small enterprises seeking financing turned to giants in the fintech industry, thus showing a growing preference for digital solutions. As we analyzed the top 13 MSME lending platforms’ websites, the research uncovered some surprising statistics that demand the lending sectors’ immediate attention. For instance, we found that 100% of the lending websites exhibited significant user experience challenges, with about 80% websites presenting navigational challenges.
Like the growing sector of MSMEs, we also found boundless opportunities for user-friendly solutions that can guide them with a smooth, efficient user experience.