‘Neobanks will play major role in realizing India’s aspirations to be small business capital of the
Credit and Finance for MSMEs: India has established a reputation globally for being the breeding ground for startups and small businesses. There are more than 89 lakh micro, small, and medium enterprises (MSMEs) registered on the government of India’s Udyam portal. However, despite accounting for 30 percent of the country’s GDP, the banking needs of MSMEs have been underserved. Entrepreneurs lose a significant amount of time in paperwork, manual banking operations, and customer support. A recent survey among SMEs in the UK found that an average enterprise chases five outstanding invoices worth an average of £8,500 (around Rs 8.18 lakh) at any given time. This also equals an average of 1.5 hours per day per SME or 900,000 hours across all SMEs. Manual admin tasks, such as accounting and invoicing, among others amount to a lot of lost time for small businesses. It can be inferred that when it comes to small business banking, ‘what you see’ is not ‘what you get’.