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How fintechs can crack the code for small business lending

VCCircle · 7m

Micro, small, and medium enterprises (MSMEs) play a vital role in the global economy, contributing significantly to GDP and employment. However, these businesses face challenges in accessing credit, particularly in countries like India. Fintech companies have attempted to address this issue through technology-driven solutions but have had limited success. To further support MSME lending, fintechs can specialize by verticals, leverage human-in-loop products, tailor underwriting to specific borrowing needs, and embed finance within other small business solutions. Additionally, government and regulators can play a crucial role by implementing supportive policies and reforms to simplify processes and enhance access to credit for MSMEs.