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By Sunil Param | January 29, 2020
Sunil Param is the Head of Content and Communications at Pine Labs.
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It a known fact that Small and Medium Enterprises (SMEs) are the backbone of the Indian economy. India has over 75 million SMEs and they are expected to grow to 105 mn by 2024. The contribution of SMBs to the Indian GDP is expected to grow from the current 40% to about 50% by 2024, as per a report by Zinnov titled "Digital SMBs - Key Pillar of India's Economy - 2019".The report states that SMEs will be a $80 billion opportunity by 2024.
The year 2020 will be transformational one for the SME industry with the launch of an e-marketplace and the increased focus on digitization. As financial inclusion makes inroads to smaller towns and cities, it is predicted that the next wave of growth in the SME space will come from eliminating the pain points of small retailers in India.
SMEs have their own set of challenges that act as roadblocks in the growth of their business. One of the biggest issues impacting the growth of SMEs is the timely availability of credit. Many a times, complex documentation process, lack of credit history, the mandatory requirement of pledging a collateral against loan are cited as reasons to deny credit to these merchants through the conventional lending mediums.
With the rise of new age fintech companies, the scenario has changed quite a bit!
Several alternative lending platforms are fast-emerging and offering loan products to SMEs to cater to their specific business requirements. Pine Labs is at the forefront of this revolution. We, along with our partners, are empowering our ecosystem of over 150,000 merchants to avail collateral-free loans. We have also managed to cut down the lengthy approval and disbursal process and hence, made it easier and faster for merchants to avail loans.
This is not all. At Pine Labs, we understand that no single product can find fitment with SMEs. Our products are designed to cater to specific merchant requirements. Also, we empower our merchants with the option of choosing a flexible repayment plan.
We believe that credit is the rocket fuel for growth of small retailers in India and here are a few reasons why:
The Centre envisions a contribution of $2 trillion from micro, small and medium enterprises (MSMEs) as India eyes becoming a $5 trillion economy by 2024. However, one of the biggest challenges to this will be access to credit to SMEs. The new age fintech companies like Pine Labs can help solve this problem by offering relevant working capital loans to businesses via a simple and quick process that is finding relevance in increasing number of small businesses.
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