Small and Medium Enterprises (MSMEs) are the backbone of the Indian economy because they are the biggest provider of jobs, right from workers to middle management levels. MSMEs are usually one-person shows where every aspect is taken care of by one entrepreneur. One of the significant problems faced by an MSME is the lack of funding required to either kickstart the business or take it a step or two ahead.
While the best source of funding for an MSME comes from a business loan, many entrepreneurs find it very difficult to secure the loans because banks find it difficult to see the virtue in the business ideas when they are on paper. Ironically, businesses need funding to prove their profitability.
Complications with MSME Loans
The Indian MSME industry is a source of pride for the country for being a continuous generator of revenue and provider of employment for skilled and unskilled labour.
However, many MSMEs still face a lot of challenges when it comes to securing finances to establish their business and generate revenue.
Lack of Financial Literacy
Majority of the MSME Entrepreneurs are first-generation entrepreneurs, first in their families to start a business. Many of them originate from low-income households with poor educational backgrounds. As a result, they do not possess the required know-how of the loan products that would benefit their business without any tensions.
Indifi provides the necessary know-how to the entrepreneur in a completely transparent and easily understandable fashion.
Dependency on Traditional Moneylenders
With the lack of knowledge about the new loan products, even the educated entrepreneurs tend to turn to traditional moneylenders who provide loans but at very high rates of interest with the requirement of collateral.
Indifi is an online lending platform that provides small business loans without security to ensure that the small businesses continue to flourish hassle-free.
Trust of Traditional Banks
Most of the entrepreneurs require loans to carry their business further after building a primary setup. In such situations, it becomes hard for the traditional banks to trust their business idea enough to sanction loans.
Indifi understands the requirements of the small businesses and provides loans quickly so that the work doesn’t stop.
Disbursal Period of MSME Loans
Because many financial institutions have complicated procedures for sanctioning loans, Small Business owners face long waiting periods before getting the loan amount in their hands. Sometimes, this waiting period extends to up to a month and may even lead to closing down the business.
Indifi provides instant business loans of up to 50 lakhs within 48 to 72 hours through completely transparent procedures.
Collateral or Guarantee
Small business owners are usually first-generation entrepreneurs who have started their ventures with very minimal sources. Most of the time, the money comes at the cost of their lifetime savings and ancestral property. As a result, it becomes difficult for SMBs to provide collateral to the financial institution.
Indifi provides MSME loan with no requirement for collateral based on the finance requirements of the business.
Documentation
The enormous amount of documentation required by many financial institutions can scare away the MSME owners, irrespective of their education and knowledge level. Most commonly, it becomes a hassle, and, in desperation, they seek the help of the traditional money lenders. This may seem hassle-free at the moment, but in the long run, it becomes a burden on the MSME owner.
As a solution, Indifi provides MSME loans with minimal documentation making the disbursal process quick and hassle-free.
Liquidity
Most of the MSMEs operate with a large inventory and no guarantee of the minimum orders. As a result, it becomes their necessity to focus only on daily operations to sustain themselves leaving no time or liquidity to focus on expansion.
Indifi studies your business requirement and provides you with tailor-made business loans to help you accomplish your business plans without having to wait for funds.
Prolonged Risk Assessment Procedures
Traditional Banks and financial institutions have lengthy and outdated risk assessment procedures which take up a lot of energy from the MSME owners. This affects the business because, most of the time, the MSME owner is the sole runner of the business proceedings.
With modern lending concepts, Indifi has simplified the lending process into a hassle-free one, allowing the MSME owner to focus on the business and not worry about the loans.
High Interest Rates
When it comes to MSME loans, many entrepreneurs turn to internal sourcing or traditional money lending. These institutions provide the loans with very high rates of interest causing the entrepreneur to sink under the burden of repaying the loans.
Indifi provides MSME loans with low rates of interest based on the eligibility criteria of the MSME owner.
Rigid Repayment Terms
Traditional banking and financial institutions and money lenders have very rigid repayment terms. As a result, MSME owners tend to shift their focus from developing their business to repaying the loan. It may also affect business performance.
Indifi has flexible repayment terms which allow the MSME owner to repay their loan as their business develops.
Conclusion
The MSME section of the business is the essence of the Indian business landscape. That is why Indifi is privileged to be indispensable support for the MSME owners by providing them MSME loans without compromising on any ethics or principles.
