As India gears up to celebrate MSME Day, FlexiLoans.com, India’s leading MSME-focused digital lending NBFC —announces that it has crossed over ₹10,000 crore in cumulative loan disbursements, powering more than 1.7 lakh loans across 3000+ towns and cities.
Notably, 66% of these borrowers hail from Tier 2, 3 and 4 regions. Since its inception, the company has supported over 59,000 MSMEs, many of them first-time borrowers, with over 10% of its loan book comprising women-led enterprises. Its assets under management (AUM) now exceed ₹2,300 crore, driven by a strong 83% CAGR (FY22–FY25) and it has remained profitable for three consecutive years.
The platform attracts over 1.3 million monthly visits, reflecting rising digital adoption and trust among MSMEs, especially in non-metro India. India’s MSME sector contributes nearly 30% to GDP (~₹150 lakh crore), with over 63 million enterprises employing 110 million people. Yet formal institutions serve just 53% of the total debt demand (~₹56 lakh crore).
Despite continued policy push, timely and adequate credit access remains a major hurdle, especially for micro-enterprises and first-time borrowers in smaller towns. According to a recent report by SIDBI, the MSME sector faces an addressable credit gap of ₹30 lakh crore, or nearly 24% of total credit demand. Traditional lending models—dependent on collateral, extensive paperwork, and urban branches—continue to fall short in reaching this segment.
Commenting on this development , Ritesh Jain, Co-founder, FlexiLoans said, “The gap is real—but so is the opportunity. Digital lending is no longer a parallel stream, it’s the mainstream. With NBFCs clocking a 32% MSME lending CAGR and digital adoption just beginning to scale, India is on the cusp of a fintech-led transformation. Legacy systems can’t serve the future of MSME credit.That’s where digital-first lenders like us are shifting the paradigm. Our digital-first model uses alternate data and proprietary risk engines to underwrite underserved businesses, not just by credit score, but by actual business performance.” What we’re witnessing is Bharat’s fintech moment. MSMEs in smaller towns are now digitally savvy and actively seeking formal credit solutions that are fast, flexible and built for their realities,” he added.
The COVID-19 pandemic served as a pivotal moment, accelerating digital lending across India. FlexiLoans’ fully paperless process—from application to disbursal—enabled MSMEs to access timely credit during critical periods, helping them restock, retain staff, and bounce back from disruptions.
Even with rising Udyam registrations and GST adoption, MSMEs—particularly micro units—remain underserved by traditional players. MSME Lending presents a credit opportunity of more than Rs 18 lakh crore.
The MSME lending has witnessed robust growth in recent years, with NBFCs emerging as front-runners. Between FY21 and FY24, NBFCs recorded a 32% compound annual growth rate (CAGR) in MSME lending—albeit on a smaller base—outpacing private banks (20.9%) and public sector banks (10.4%).
This signals a clear shift towards agile, tech-enabled lending models that can cater to the underserved with speed and precision. Digital lenders are leveraging AI, alternate data, embedded finance, and platform integrations to deliver working capital to the last mile.
The total debt demand is estimated at Rs 95.6 lakh crore, of which Rs 50.7 lakh crore is deemed addressable through formal lending channels, particularly by banks and NBFCs. As of H1 FY25, the formal credit supply stood at only Rs 32.4 lakh crore, leaving a credit gap of Rs 18.3 lakh crore.
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