Asia Fintech Lending Weekend Read

Rupifi: Decoding Technology to Empower Indian Small Businesses With Access to Digital Credit

The Micro, Small, and Medium Enterprises (MSME) sector has been key to India’s economic engine, contributing ~31% to total GDP of the country, as against global average of 49%, and generating large-scale employment opportunities. With a sustained growth rate of 10% in the past few years, the future of the MSME sector seems promising. However, the sector which lacked digitisation pre-pandemic, is showing some initial signs of revitalisation but still needs some oiling to reach optimum status.

Jawaid Iqbal is a Co-founder of the Indian B2B payments company, Rupifi, whose product is being used by leading B2B marketplaces in India. Prior to Rupifi, Jawaid was with Google for 8 years as a Staff Software Engineer where he worked on various high impact products. He started with G-Suite and later moved to Google Docs. Working extensively on Machine Learning to build Google’s latest systems around recommendations to users, he has been a part of the team developing products that are being used by millions of users globally.

Here he shares his thoughts on decoding technology to empower Indian small businesses with access to digital credit.

Jawaid Iqbal, Co-founder, Rupifi
Jawaid Iqbal, Co-founder, Rupifi

The post-pandemic era has seen a rise of digital adoption by 18%. While MSMEs have benefitted from the increase in usage of digital channels, especially adoption of digital payments, the sector is yet to reach even a 50% adoption rate, owing to the lack of awareness of the impact of digital transformation. Moreover, with reduced access to formal financial services, the lack of working capital stands in the way of several businesses making a full recovery. 

While small businesses do not have the capital to make large investments in newer technology – IoT, AI/ML or cloud –the pandemic-led disruption and acceleration has helped them realise the importance of digital adoption to better leverage opportunities in today’s ever-changing environment. Multiple government measures have been extended to help MSMEs in crucial times, but more concerted efforts must be made to ensure affordable innovations are also accessible to these enterprises. Fintech companies must be at the forefront of this effort by not only innovating solutions that are affordable but also increasing awareness and making these financial solutions easily accessible. 

Technology empowering small businesses

Moving to digital platforms is not an option but a necessity for businesses today, everything from procurement of raw materials to payments processes have been digitised. Digital acceleration has helped several businesses to thrive remarkably not only in internal and external markets but also in newer channels. 

A significant change in the business landscape is the growing relations with e-commerce. The digital B2B commerce players are enabling small businesses to use digital methods for processes and platforms to exhibit and vend their goods. These associations are helpful from a revenue standpoint but also enable technology sharing and awareness of digital solutions. This is further helping MSMEs revise and incorporate better methods of operation to increase profitability.  

Technology harnessing will help with easy operations, but it could also lead to making better products suited to the needs of the consumers. Better products will also help MSMEs maintain relationships with larger enterprises that commission some of their work to small businesses. Hence moving forward, MSMEs should also look into R&D activities to ensure business continuity and product innovation in their respective space with the help of technology. 

The road ahead

For the continued growth of any business, the ability to do the proper checks and balances is crucial. However, most MSMEs are unaware of proper accounting procedures. The numerous small-ticket transactions with a lack of organised records pose the most prominent issue when applying for important financial transactions. As a result, they are often unable to meet documentation protocols organised to qualify as loan applicants to financial institutions.

The yellow brick road that would lead to the empowerment of the industry is paved with enhanced credit access, more specific financial products, embedded lending, and a safer experience. The quick, efficient, and straightforward onboarding process has been a yardstick in this digital journey, be it in the form of QR code payments or paperless processes. When it comes down to a credit line, MSMEs often face trouble but using data analysis and technology to offer cash flow-based underwriting instead of balance sheet-based underwriting would considerably help bridge the gap in creditworthiness. 

The days of cumbersome manual background checks are long behind. The introduction of embedded lending in this industry has fetched immediate access to credit using a set of simple Interfaces and APIs suited to the need of the B2B marketplace. This not only provides a complete digital journey but allows curation of customised products and real-time monitoring. Providing a safer experience is imperative, and technology includes aid through multiple checkpoints for fraud prevention. The use of various triangulations of geo/location data to map out the coordinates of SME borrowers, especially in remote locations where the ticket size is small and/or the physical verification is absent.

The future of MSMEs relies on embedding finance to ease access to credit, giving the borrower a better experience and support. AI and ML are not only other steps towards a better digital experience in this sector. Payment systems can prompt the preferred payment instrument that best suits a purchase at the time of checkout by using AI and analysing past payment patterns to provide a personalised & secured payment experience to consumers. Solutions like video KYC and chatbots are just the tip of the iceberg. With the advancement of data collection, the future of digital credit systems for MSMEs will be the building block of an empowered industry.


  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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