BharatPe: Bridging the Credit Gap of MSMEs and Retailers with Easy Loans

There are currently over 60 million  MSMEs in India, and the global proportion of MSME businesses is 90%. The ever-expanding MSME sector in India has witnessed a staggering 2X growth over the past two years, according to an analysis released by Blinc Invest, but there is still a significant credit gap that has to be closed because India is still a relatively untapped market, especially when we consider the tier-3, 4 and beyond markets in the country.

Although the average loan ticket size has increased for small and medium-sized businesses, it has remained unchanged for the micro-sector, showcasing the unequal distribution of loans between micro, small and medium MSMEs. Also, there still remains a huge chunk of MSMEs and retailers that don't have access to credit to grow their business.

While the Indian Government, at the time of COVID-19, rolled out multiple stimulus packages aimed at reviving the flattening economy, inaccessibility to finance remained an obstacle and a chronic problem for Indian (M)SMEs. In fact, the situation worsened due to the pandemic as traditional banks and NBFCs shied away from giving out new loans at that point in time, owing to the unpredictability of the market.

SMEs and the Credit Deficit

For SMEs, the lack of access to capital has acted as one of the biggest roadblocks to their growth, for years now. Over decades, a majority of them have remained dependent on private money lenders and informal sources for finance who charge an exorbitantly high rate of interest. Approximately, even today, 40% of Indian MSMEs are forced to borrow loans from informal sources that charge on an average 2.5% higher interest rates than those in the formal sector¹. This is due to the lack of credit options from banks and financial institutions to MSMEs and offline retailers, where lengthy documentation, verification, and a rigid payments structure act as roadblocks.

This is where BharatPe’s products & services come to the forefront, with swift, hassle free and innovative loan solutions. BharatPe’s loan application to disbursal process is 100% digital. BharatPe facilitates loans in partnership with RBI approved NBFCs. Merchants also have the option of paying via easy daily installments which can be more convenient than paying a cumulative sum at the end of the month.

Easier Working Capital Loans for Your Business!

The small businesses in India need two kinds of credits - term-loans for one-time heavy expenditure & small loans as operational credit to be used as working capital to scale their business on an ongoing basis. For MSMEs and offline merchants, working capital loans are critical for their growth. If these can be arranged in a hassle-free manner, it can help them to support their businesses and grow further. It is this gap that has been identified and addressed by BharatPe, with a digitally optimized credit facilitation process that allows quick loan approvals and disbursements, as well as simple repayment model.

BharatPe offers collateral free loans up to ₹10 Lakh to micro, small and medium scale businesses (including offline retailers).. Themerchant can borrow the sum easily without pledging security, at low interest rates. We are committed to serve the small merchants and the MSME community of India, which has been highly underserved by the traditional banking and financial institutions. The new age digital lender is poised to become the digital bank of these retailers, shopkeepers and merchants.

BharatPe has a network of over 10 million merchants across 400+ cities in the country. A leader in the UPI offline transactions, having processed 300 million+ UPI transactions a month (annualized Transaction Processed Value of US$ 26 Bn+), the company has already facilitated the disbursement of loans totaling INR 100B+ for small merchants and MSMEs. Also, the company’s interoperable BharatPe QR and BharatPe Swipe allow merchants to do digital transactions without any hidden charges.The rise of digital payments across customers and increased penetration of the internet has resulted in increased adoption of digital lending. Fintech, with their tech-driven products have an edge over traditional financial players as they can reach out to merchants across the country, without any infrastructure cost or investment in manpower.

Merchants are at the heart of everything that BharatPe offers. We aspire to serve as a one-stop destination for all merchant needs and, in this journey, lending products and services play a crucial role. BharatPe has brought millions of merchants under the fold of the digital economy across urban as well as digitally underpenetrated tier-2,3 and tier 4 markets.

Offering innovative products that can empower MSMEs, who form the backbone of India's economy is the first and foremost priority at BharatPe. With innovation at the heart of all our products, a 100% digital process and convenient payback option, BharatPe is poised to lead the pack of digital lenders in India with an aim to bring smiles to the faces of millions of merchants in the country.

¹Omidyar