Muthoot Finance, fintech startup Rupifi to help 15 million small, medium enterprises get instant credit

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October 19, 2021 3:39 PM

Credit and Finance for MSMEs: Launched in January 2020, Rupifi allows SMEs to flexibly repay their dues as and when required with a per-day interest pricing but without any monthly EMIs.

rbiCredit access has been among the biggest challenges for MSMEs in the country as banks have been cautious in giving out MSME loans that are considered to be risky.

Credit and Finance for MSMEs: Digital business-to-business payment startup for small and medium enterprises (SMEs) Rupifi on Tuesday announced a partnership with non-banking finance company Muthoot Finance to help 15 million SMEs access instant credit over the next few years. Launched in January 2020, Rupifi allows SMEs to flexibly repay their dues as and when required with a per-day interest pricing but without any monthly EMIs. Through this tie-up, the startup said it is looking to build its SME portfolio over the coming years.

“We have been at the forefront of enabling frictionless and cash-flow linked credit to MSMEs for the past 12 months. We are currently working with B2B marketplaces across FMCG, pharma, fashion, agriculture and food domains, providing the SMEs transacting on these platforms with instant credit for their purchases. We have SME customers in more than 230 small towns and cities across the country and we have analyzed more than a million data points over the past few months in building a robust cash-flow based underwriting framework,” said Anubhav Jain, Co-founder and CEO of Rupifi in a statement.

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Most of these small businesses do not get unsecured credit from banks, NBFCs, or even fintech’s today, and thus have to rely on secured loans to manage their working capital, he added. “Indian SMEs are going through a difficult phase especially post covid.  At Muthoot Finance, we are building products and driving various initiatives to provide them working capital support. Rupifi has built strong B2B embedded infrastructure and “Buy Now Pay Later” (BNPL) is the need of the hour product for Indian SMEs, especially driven by increasing digitisation post covid,” said Jayachandran B, Chief Operating Officer – Business Loans, Muthoot Finance.

Credit access has been among the biggest challenges for MSMEs in the country as banks have been cautious in giving out MSME loans that are considered to be risky. However, the government had rolled out multiple credit guarantee schemes to encourage banks to lend more to MSMEs. According to the RBI data, banks had deployed Rs 11.10 lakh crore to micro and small businesses in August 2021, up by 1.1 per cent only from Rs 10.98 lakh crore in August 2020. Moreover, in FY21, MSME loans witnessed nearly a 52 per cent jump in value. From 16.2 per cent in FY17, the MSME loan value in commercial loans jumped to 24.6 per cent in FY21, credit bureau CRIF High Mark said in its report How India Lends 2021 in September.

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