As India’s economy experiences unprecedented growth, the landscape of small and medium enterprise (SME) lending is set for substantial expansion. In this blog, we delve into the future of SME lending in India, shedding light on for what lies ahead.
1. Easier Access to Capital
The surge in digital lending platforms is transforming the SME lending sector, providing entrepreneurs with efficient and convenient access to capital. This makes it easier for SMEs to get financing quickly, allowing them to focus on their core business. Additionally, digital lending platforms offer lower interest rates than traditional lenders, providing SMEs with a more affordable and convenient option.
2. Analytics for Data-Driven Decision Making
Witness the impact of financial technology innovation on SME lending with the use of analytics. Data analytics is being used to assess a borrower’s creditworthiness, with alternative credit scoring models relying on factors like social media behaviour, online transactions, and business performance. This is particularly beneficial for emerging businesses lacking extensive credit histories.
3. Rise of Collaborative Ecosystems
Collaboration between financial institutions, regulators, and SMEs is another new trend in SME lending. This trend aims to enhance SME loan disbursal, simplify access to credit, and help reduce interest rates. This collaborative approach can help bridge the gap between financial institutions and SMEs, allowing easier access to the capital they need to grow and succeed. It also helps reduce credit risk for financial institutions.
4. Blockchain, Machine Learning, and AI Innovations
With blockchain, machine learning, and artificial intelligence becoming the new trend, these innovations are also making a mark on SME lending. Blockchain-based platforms offer secure, transparent, and decentralized funding options while machine learning algorithms enable lenders to make more accurate credit assessments.
5. Specialized SME Lending Cards
Another trend making the rounds is specialized financial tools such as founderscard. Corporate credit cards like founderscard are becoming increasingly popular among SMEs. These cards allow businesses to manage their expenses, track their spending, and access a variety of rewards. Compared to traditional cards, with founderscard you get access to unparalleled credit limits, with features such as contactless payment and EMV chip security. It also features up to 51 days of interest-free credit, a ‘Convert to EMI’ feature, and acceptance at 10,000+ merchants across 100+ countries.
In conclusion, the future of SME lending in India is promising. Digital platforms are democratizing access to capital, and emerging technologies such as blockchain, machine learning, and artificial intelligence are set to revolutionize lending processes. Alternative credit scoring and improved collaboration are enhancing accessibility and tailoring financing to the unique needs of SMEs. With founderscard leading the way with its cutting-edge credit offerings and innovative features, the future of SME lending in India is indeed bright.