Latest News | Digital Footprint to Help MSME Get Up to Rs 5 L Loans from Muthoot FinCorp ONE
Get latest articles and stories on Latest News at LatestLY. In a groundbreaking move, small businesses such as street vendors can now get loans of up to Rs 5 lakh from Muthoot FinCorp ONE just on the basis of the daily transactions they do using QR-code.
New Delhi, Dec 2 (PTI) In a groundbreaking move, small businesses such as street vendors can now get loans of up to Rs 5 lakh from Muthoot FinCorp ONE just on the basis of the daily transactions they do using QR-code.
Muthoot FinCorp ONE, a strategic business unit and the digital platform of Muthoot FinCorp Ltd (MFL) will offer loans with daily repayment options to Micro, Small and Medium Enterprises (MSME) that use QR-code based apps for daily collections, the NBFC said in a statement.
This is in line with a 'New Credit Assessment Model' for small businesses, which Finance Minister Nirmala Sitharaman had announced in her Budget presentation on July 23. Under the model, banks were required to assess small businesses based on their 'digital footprints' and not on their balance sheets.
According to a report by IFC (International Finance Corporation), India's nearly 6 crore MSMEs contribute 31 per cent to the GDP, employ nearly 13 crore people, and make up 45 per cent of exports. Yet, despite being the backbone of the economy, they remain extremely credit-starved. The current addressable credit gap for MSME in India runs into a few lakh crore rupees.
"This lending product leverages QR-code transaction histories to offer credit to small business owners who often lack formal financial access despite demonstrating strong cash flows," the Muthoot statement said.
Muthoot FinCorp ONE also helps them grow as their loan repayment is simplified through automated daily deductions/repayments, thereby providing financial flexibility.
Helped by strategic partnerships with the country's top digital payment platforms, this lending programme represents a breakthrough in India's digital lending landscape, combining the benefits of data-driven credit assessment, end-to-end digital journey and automated repayment options to MSMEs nationwide.
Chandan Khaitan, the CEO of Muthoot FinCorp ONE, notes that India has roughly 60 million Informal Micro Enterprises (IMEs). It is one of the largest employment creators in the country and contributes significantly to the country's GDP.
"The aim of a QR-code-based lending program is to make credit accessible to such IMEs who traditionally face barriers in accessing formal finance. This product is designed around their daily business needs, enabling sustainable growth. By aligning credit access with digital cash flow data, we offer MSMEs a new path to financial strength," he said.
This approach, he said, enables quick funds access with daily automatic repayments, eliminating manual effort. "Using this method, we streamline lending and support financial growth while promoting repayment discipline among small businesses. This is financial inclusion in action, driving a significant impact on India's entrepreneurial community. Since launch we have enabled more than 75,000 IMEs," he said.
Muthoot FinCorp ONE's QR-code based lending program aligns with Muthoot FinCorp Ltd's mission to empower the lives of the common man, by making loans more accessible and affordable for small business owners.
Thomas John Muthoot, Chairman and Managing Director, Muthoot FinCorp Ltd, said, "Muthoot FinCorp ONE's QR-code-based lending program is a transformative initiative for India's MSMEs, particularly in underserved regions. By harnessing technology and leveraging trusted partnerships, we have created a lending solution that is simple, scalable, and tailored to the daily cash flow needs of small business owners."
The initiative, he said, aligns with the Finance Minister's vision, articulated in the last Budget, to promote financial inclusion for MSMEs by moving from conventional assessment methods to leveraging customers' digital footprints.
"By underwriting loans based on their digital transactions, this product opens up new credit opportunities for an underserved and excluded segment, empowering them to grow and thrive," he said.
Muthoot FinCorp ONE's QR-code-based lending program marks a key step towards the adoption of Government of India's upcoming initiative of Unified Lending Interface (ULI). With this new programme, lenders will benefit from the simplicity of facilitating credit through ULI, while borrowers will enjoy a seamless and hassle-free loan process.
This integration will further streamline the credit ecosystem, enhance customer experience, and accelerate a nationwide shift toward digital lending, paving the way for greater financial inclusion among small businesses.
Muthoot FinCorp ONE is an SBU (Strategic Business Unit) of Muthoot FinCorp Ltd which provides an all-in-one comprehensive financial app or platform that is revolutionising the way people manage their finances online. Across lending, investing, saving, or making payments, the platform seeks to make it seamless and convenient for its customers to access the right financial products and services required through their various life stages.
Muthoot FinCorp Ltd, the flagship company of 138-year-old business conglomerate Muthoot Pappachan Group (MPG), is India's leading non-banking financial company (NBFC). The firm offers more than two dozen financial products and services across India through its more than 3,700 branches, including gold loans, loan against property and business loans, along with products from its Group companies such as two-wheeler loans, affordable housing loans and used car loans.
(This is an unedited and auto-generated story from Syndicated News feed, LatestLY Staff may not have modified or edited the content body)