How supply chain financing can resolve capital issues for MSMEs

Micro, Small, and Medium Enterprises (MSMEs) employ approximately 111 million people and account for about 30% of India’s GDP. These businesses are known as the backbone of the Indian economy. According to World Bank data, MSMEs are the largest employers in developing countries despite having the least financial and regulatory support. Their ability to survive and thrive is dependent on their ability to obtain sufficient funding.

However, banks limit their exposure to MSMEs due to the high cost of service and the risk of lending without adequate collateral. Credit risk assessment is complex for lenders due to a lack of structured financial information, historical cash flow position, repayment trends data, etc.

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