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Tata Capital > Blog > How Are Digital Lending Platforms Transforming the MSME Sector?

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How Are Digital Lending Platforms Transforming the MSME Sector?

How Are Digital Lending Platforms Transforming the MSME Sector?

Even though the industry has always used technology, it is only in the last decade that traditional lending has gone through a paradigm shift. The government’s push towards financial inclusion, availability of smartphones, and easy internet subscription packs to tech-savvy millennials has helped popularise the digital lending platforms.

This transformation was brought about by the fintech companies who offered the same services as traditional lenders but in a smart, customised, and hassle-free manner. No wonder, with each passing day, a greater number of MSMEs and corporates are turning out to digital lenders for business loans!

How is digital lending helping MSMEs?

MSMEs contribute significantly to the socio-economic development of the country, especially in employment generation. Despite being one of the key drivers of economic stability in the nation, they continue to face challenges that hamper their growth. Digital lenders address their pain points and offer them easy access to timely credit in the form of SME loans, thereby adding value to their business.

• Ease of usage:

Digital lenders provide consumers with entirely automated, end-to-end services like information exchange, loan servicing, record maintenance etc. This has dramatically reduced the loan turnaround time and improved the convenience factor.

Additional Read: Why Is MSME Loan the Perfect Finance for Small Business Owners?

• Competitive interest rates:

From documentation to loan processing, digital lenders have simplified the entire process using automated channels and mediums. This practice has significantly reduced their serviceability costs, allowing them to offer competitive business loan interest rates successfully.

• Greater transparency:

Government-funded infrastructure initiatives like e-KYC, creation of Jan Dhan accounts, GST implementation and improved Aadhar access have significantly contributed to the digital lending success. This enhanced transparency is one of the most significant factors why business owners are trusting them willingly.

• Innovation:

Through their unique and one-of-a-kind product offerings, new-age digital lenders are quickly improving the lending journey. As more and more leading traditional lenders join the race in digital finance, there will be greater innovation among their services, thereby leading to a significant improvement in credit accessibility, customer-oriented services etc.

• Technological advancements:

With growing interest in digital lending solutions, India will continue to witness breakthrough discoveries in technology like e-signatures, biometrics enabled authentication, e-mandates etc., thereby simplifying the loan process and enabling greater credit access for MSMEs and small businesses

Additional Read: Best Way to Get an MSME Business Loan

Experience digital finance solutions from Tata Capital!

Tata Capital offers consumers the dual advantage of the traditional setting and technological advancement. With enhanced, customer-friendly product offerings and services, MSMEs can gain access to easy credit. They can also avail of attractive loan terms and flexible repayment options for a hassle-free loan journey.

What’s more, you can use tech-enabled features like business loan EMI calculators to precisely estimate your EMIs and plan your budget efficiently. To know more about our services, log onto our website today!

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