Biz2Credit is expanding its small business lending operations into a market without much experience with alternative finance. An announcement on Friday (June 3) said the company will enter India, providing online financing to its SMEs.
While India may not have the most robust alternative lending industry in the world, it's the size of its SME population that's attracting Biz2Credit, the company said.
"India has [a] huge market of around 29 million small businesses, and SMEs contributed 45 percent to the county's industrial output and 40 percent of total exports," said Biz2Credit President and Cofounder Ramit Arora in a statement.
The executive added that India is also on track to see similar expansions in alternative SME finance as already experienced in other markets like Europe and the U.S.
"The new trends in SME financing are getting influenced by [the] digital revolution," he said. "This includes analytics-based lending, peer-to-peer lending and various other variants."
Arora said digital finance is expected to make up at least 10 percent of the financing market in India, worth, in total, $300 billion today.
But the nation's massive SME community struggles to find financing still, according to Arora.
"Entrepreneurs often resort to using personal credit cards, home equity lines or their own savings to fund businesses when there are much better options," he said. "We will help Indian entrepreneurs to quickly secure the funding they need to grow their businesses."
Biz2Credit secured a partnership with India's Tata Capital to facilitate SMEs' access to financing, reports said, and to collaborate with banks and other lenders. According to Arora, the entrance in India is aligned with Prime Minister Narendra Modi's "Digital India" and "Make In India" efforts.
Last year, the government introduced new guidelines via the Securities and Exchange Board of India that aimed to open up the nation's alternative finance market for SME borrowers.