The “India Digital SME Credit Report 2023,” a collaborative effort between GetVantage and Redseer Strategy Consultants, sheds light on a substantial credit deficit amounting to approximately $220 billion, casting a shadow on the progress of digitized businesses within the country. Despite an injection of $53 billion in the fiscal year 2022 and an estimated $165 billion considered feasible after factoring in non-viable enterprises, the existing working capital shortfall persists at a significant $112 billion.
Anticipating a notable shift in the upcoming five years, the report foresees a burgeoning demand for credit that will soar beyond $570 billion, mirroring the doubling of digital SMEs in number. This deficit is a significant barrier, stifling the potential for innovation, job generation, expansion, and efficiency enhancement among businesses operating within the new-age economic landscape.
Emphasizing the paramount significance of alternative financing avenues, such as revenue-based financing, the report underscores their pivotal role in bridging this financial gap and nurturing overall economic growth. As traditional lending methods, particularly those offered by commercial banks, struggle due to collateral and documentation limitations, innovative models like revenue-based financing are proving instrumental in granting unrivaled access, flexibility, and transparency, making them apt solutions for fueling the untapped growth potential of SMEs.
In this context, the collaboration between GetVantage, Redseer Strategy Consultants, and the insights outlined in the report signify a pivotal moment for India’s economic landscape, calling for a concerted effort to address these challenges and unlock the potential of the digital SME sector.