NBFCS – The game-changer for the SME’s

NBFCS – The game-changer for the SME’s

NBFCS Game Changer For the SME’s

Non-Banking Financial sectors in India have gone through major growths over the last few decades. Their contribution and their ways of evolving from a small banking sector to innovative strata have been the best thing for the economy of India.

They have provided financial inclusions in the economy of the nation and thus given an impact that is multidimensional. These have helped in accelerating the growth of MSMEs and also the SMEs which are actually the pillars of Indian economy and have helped in establishing the financial segment of India.


These institutions have emerged as a wonderful alternative segment for the traditional banking system. This has happened due to their financial procedure that is flexible. They have corrected the age-old business funding procedures and have revolutionized the funding procedures too which aims more at benefitting their clients.

With this, it can be easily claimed that NBFCs have been the best game changers for MSMEs and SMEs as they have been successful in providing the much-needed financial assistance to small as well as large businesses in the nation. The ways NBFCs are able to change their current business towards a remarkable growth is what is described here in detail.

How are the NBFs contributing to the growth?

The contribution of the traditional banking system has been very low as they are not able to reach out to those unbanked masses of India who need financial support. This is a major gap which has been filled in by Non-Banking Financial sectors that have tried to make a mark in this industry.

There are many customers who have been left out by the banks and NBFCs have been significant in putting a hold into this genre. They have developed the entrepreneurship spirits in our nation.

Their innovative ways of funding have made the customers attracted to them as they have been able to address the larger section of the society regarding debt requirements. Saying this, NBFCs have always played an exquisite role in generating funds to the start-ups, the micro, the small and the medium business enterprises in India.

MSMEs and SMEs

They have provided financial boosting to the MSMEs and SMEs and have helped in nurturing and stimulating the development of the Indian economy. They have reproached and understood the gaps that have been long left by the banking sectors and thus, their efforts to reach out to every niche of the country have become highly successful.

Many underserved retail business owners have been provided basic credit facilities which were rejected by many banks. Thus, a major portion of the success of the Start-ups of SME in our nation is due to the progress of these non-banking financial sectors.

NBFCs helping out SMEs

The following are the approaches on which NBFCs are helping out SMEs rapidly.

1. A very different approach

These days NBFCs have become a wonderful segment of funding for start-ups or small industries due to the reason that they provide flexible funding procedures with lesser paperwork. Collateral free business loans are sanctioned by them and don’t allow the customers to get involved in much documentation. Adding to that, these sectors help small businesses to access the capital at a very cheap and affordable rate with correct timings. Therefore, the NBFCs help in the financial behavior of the lenders, not depending on traditional methods. These make easier transactions with SMEs too.

2. Technologically driven procedures

These days, with major growth in the financial segment, the bans, and all other financial segments are depending on upgraded technologies such as machine learning, AI or artificial intelligence and Data Analytics. With these technologies, NBFCs are being able to simplify the process of borrowing for their retail businessmen. Application of the process of algorithm is helping in best results in the ways of turnaround timings and underwritings in credit. With these innovative approaches, designing powerful products and customization as per the business requirement has become possible and easier too.

3. Faster assessment with easier application processes

The start-ups and small business owners will not have to run from pillar to post for financing, thanks to NBFCs and its easy processes. One could rely on the models of lending and avail faster and easier lending options that have absolutely no hassle.

NBFCs possesses innovative approaches and strategies towards funding that have not only improved their speed by also given better credit processes altogether. The reliability, as well as transparency of these processes, has been upgraded every now and then.

All processes and formalities are done online and thus there is only minimal paperwork with quicker processing. This removes the exhaustive filling of the long letter like application forms.

4. Disbursement of the loans within few hours

This is a wonderful procedure maintained by the NBFCs. The capital market for SMEs has evolved gradually with the travel and shopping market.

These days no one has time to spare and thus everything has become online or digital. With this technological development, small business owners are able to meet their immediate loan requirements as they can apply online itself.

Through online methods, the creditworthiness of the borrowers can be assessed easily thus maintaining a trustworthy relationship. With this, business loans can be processed easier and faster with NBFCs, unlike banks.

5. Easier Terms and Rules

The repayment terms and conditions of the NBFCs are not so much stricter. Borrowers are provided the flexibility and comfort for the repayment of their loans.

They are given vast choices of refunds such as- monthly, weekly or absolutely no charges on late repayment of loans. This obviously depends on business to business and the bond of trust that they build with the potential customers. Thus, with all these benefits, SMEs prefer NBFCs for any type of loan in the business.

All said and done, it can be concluded that with the gradual growth of the NBFCs such as Flexi loans, getting business loans these days is no more a hard task for the start-ups or small enterprises.

They are not only affordable, convenient but also their speedy work process ensures funding done quickly and properly. They are best suited for SME businesses. Processes are robust and decision making is faster too thus making the NBFCs popularity amongst the business owners.

No countless processes, no standing in a queue of people, no long application procedures, NBFCs have given a new direction to the small and medium businesses thus helping India to grow with new business capitals.

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