In spite of the collateral cover and underwriting process, several public and private banks are burdened with heavy NPAs. This has resulted in banks tightening their lending process and stipulating additional conditions for loan grant. In such a situation, SMEs find it difficult to obtain SME finance, given the insistence of additional collateral. The loan application process in banks is long drawn and time-consuming.
On the other side, the Indian economy is a growth engine of the world. Thus, there is significant growth and business opportunities in the SME space, which requires funding. The gap between the demand and supply of SME finance has given birth to the new age fintech lenders. The fintech players are the preferred choice for SME finance as they have removed all the shortfalls of lending to SMEs that was present in the traditional banking system. Some of the advantages that fintech lenders offer …