Video: Macro variables very positive ahead in BNPL lending: BankBazaar’s Pankaj Bansal

Credit and finance for MSMEs: The growth in BNPL for MSMEs has seemingly come on the back of the advantages it offers over traditional lending such as fast transactions, instant approvals, flexible payment options, minimal documentation, etc., to remove any friction in the lending process digitally.

Written by MSME Desk

February 19, 2023 18:26 IST

Credit and finance for MSMEs: Amid growth in demand for short-term credit, the buy now pay later (BNPL) lending model is catching both MSMEs and investors’ attention to meet the working capital shortage the MSME sector has been facing for years. According to a November 2022 report by data and analytics company GlobalData, the BNPL market in terms of transaction value is expected to be worth $4.9 billion in 2022 and grow at a likely compound annual growth rate (CAGR) of 32.5 per cent to become $15 billion in size by 2026, driven by increased demand for short term credit coupled with growing consumer preference for online shopping.

The growth in BNPL for MSMEs has seemingly come on the back of the advantages it offers over traditional lending such as fast transactions, instant approvals, flexible payment options, minimal documentation, etc., to remove any friction in the lending process digitally.

Also read: BNPL: What makes buy now pay later click with MSMEs

According to BankBazaar’s Chief Business Officer Pankaj Bansal, “what (capital) MSMEs can use for their business, through BNPL they can save that money. Hence, cash flow can be much better and once the MSME repay the amount, its credit score can also improve.” Talking to FE Aspire at the ScaleUp Summit organised recently by the Financial Express, Bansal discussed BNPL catering to on-demand credit needs of MSMEs, lenders’ interest in BNPL, and more.