4 microfinance companies help micro and small businesses with unsecured loans

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Microfinance is a boon for entrepreneurs because it helps them get small business loans without the burden of collateral. This allows these entrepreneurs to start or grow their business at a micro-level.

There are around 6.3 crore of micro, small and medium enterprises (MSMEs) in India which contribute 29% of the GDP. Micro-enterprises alone account for 93 percent of this number. However, despite this, the micro-sector has the most difficulty with financing due to its unorganized nature and lack of documentation and paperwork.

SMBShistory lists five microfinance platforms helping micro and small businesses obtain small loans.

Yes finance

Aye Finance, based on Gurugram, aims to solve the problem of microenterprises’ lack of access to credit through technology-based processes to create credit information.

Founded in 2014 by Sanjay Sharma and Vikram Jetley, Aye Finance offers Rs 1-3 lakh as working capital to micro-business owners, who typically have annual sales of Rs 25-50 lakh.

The company has increased its footprint to 173 branches in 18 Indian states and disbursed loans worth Rs 3,300 crore to over 2,30,000 Indian micro-enterprises. It doubled its income in fiscal year 2019-2020 to Rs 410 crore.

Zip loan

Serving the working capital needs of kiranas and small businesses, Zip Loan is a New Delhi-based fintech lending platform that provides micro-loans up to Rs 5 lakh to small and medium enterprises (SMEs).

Founded in 2016 by Khitij Puri, Zip Loan has so far disbursed over 11,000 loans at a reduced interest rate of 24%.

Through its ZipScore (Machine Learning Based Risk Assessment), lean operations and co-lending model with major banks and NBFCs, Zip Loan provides commercial loans of up to Rs 10 lakh at a fraction of the cost compared to traditional lenders and in one of the industry’s fastest turnaround times.

Tirelirex

Moneyboxx is a Mumbai-based NBFC founded by Deepak Aggarwal and Mayur Modi that provides loans to individuals, who are in a significantly underserved market.

The company was established to address the unmet credit needs of microenterprises by providing simple, cost-effective and technology-driven financing solutions.

NBFC BSE Listed Provides Low Cost Unsecured Loans from Rs 50,000 to Rs 3,000,000 to micro and small businesses in most Tier II and III cities in India and charges 27% interest.

Moneyboxx has expanded its presence to 22 branches in four states with assets under management (AUM) of nearly Rs 64 crore as of March 31, 2021. It has an income of Rs 4.17 crore at FY20.

Backup solutions

Save Solutions is a Bihar-based company that focuses on providing access to financial products through bank kiosks and customer service points (CSPs) to rural and semi-urban unbanked citizens.

Founded by Ajeet Kumar Singh, Pankaj Kumar and Ajay Kumar Sinha, Save Solutions has roots in India in 488 districts with over 12,000 kiosks in rural areas.

In the microfinance division, the company has given loans to around a lakh of clients without taking any guarantees or guarantees from the client. Loans can be taken out for the creation of micro-enterprises such as a dairy or a store, etc., at an interest rate of 21%.


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