India FinTech Industry - Digital MSME Lending Poised For A Long Runway Of Growth: Systematix
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Systematix Research Report
We hosted Indifi Technologies – a leading online platform that enables debt financing for small businesses in India.
The key takeaway is that with conducive government initiatives and increasing digitalisation of transactions, digital micro, small and medium enterprises lending is poised for a 34% compound annual growth rate between FY20-23E to $350 billion in FY23E.
A marketplace MSME lending business model, which improves the interaction between an e-commerce platform, bank/non banking financial company and the borrower, is more suitable for risk-adjusted profitability.
The model also enables paperless processes and uses alternate data, leading to lower opex and apt transaction information.
We expect such platforms to generate higher return on equities given the lower opex and improved ability to price risks.
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