Fintech Companies Bridging MSME Lending Gap Amid Economic Challenges: Niyogin CEO

Niyogin Fintech Limited offers loans, finance, and investment as well as lending and allied activities to micro, small, and medium enterprises. The company caters to India’s underserved MSMEs and rural individuals and is engaged in diversified segments such as Rural Tech, Credit, and Wealth Tech.

In MSMEs, Niyogin counts on its strong customer connection to drive business growth on a revenue-sharing model. The company further operates on a hybrid model wherein it provides technology solutions across its different segments to its partners, who in turn handle the physical leg of customer servicing for a revenue share.

In an exclusive interview to Bizz Buzz, Tashwinder Singh, CEO and MD of Mumbai-based Niyogin Fintech Limited, said Niyogin leverages cutting-edge technology to offer efficient and effective financial services, ensuring convenience and accessibility for its customers. He said their specialisation in offering customised solutions to tailor financial solutions to meet the specific needs of its clients, speed and efficiency to enable customers to access funds and other financial services in a hassle-free environment.

How has the current economic climate impacted MSME lending, and what role is the fintech industry playing in supporting MSMEs during these challenging times

What are the recent government policies and compliance requirements affecting fintech companies involved in MSME lending, and how are these companies adapting to these changes?

Recent government policies have reshaped fintech compliance in MSME lending, introducing data privacy regulations that compel companies to strengthen cybersecurity and update data practices. New fair lending guidelines require transparency in loan terms, leading to revisions in documentation and communication to prevent predatory practices. The shift to digital KYC requires streamlined verification systems, prompting the adoption of automated customer onboarding processes. Additionally, updated credit reporting requirements are driving enhancements in data management systems, ensuring more accurate and reliable reporting. These changes are aimed at creating a more secure, transparent, and efficient lending environment for MSMEs.

With the increasing emphasis on digital payments and cashless transactions, how is the fintech industry enhancing its digital lending infrastructure to better serve MSMEs?

As digital payments rise, fintech companies are transforming loan processes with comprehensive digital solutions. By reducing paperwork, utilizing advanced data analytics and AI for precise credit risk assessments, and automating KYC, they accelerate approvals and tailor financial offerings. The integration of digital wallets and payment gateways further simplifies repayments, making lending more accessible and efficient for MSMEs in an increasingly cashless economy. These innovations are streamlining the entire lending process, ensuring faster and more personalized financial support for small businesses.

What challenges do MSMEs face in accessing credit, and how do fintech platforms address these issues in line with government regulations and support schemes?

MSMEs frequently struggle with credit access due to limited financial history, lack of collateral, and inadequate infrastructure. Fintech platforms are tackling these issues by using technology to offer tailored solutions through alternative credit scoring and data analytics. They simplify the application process and adhere to regulations like CGTMSE, enabling collateral-free loans while enhancing transparency. This synergy between technology and regulation effectively bridges the credit gap, providing crucial support for MSME growth and sustainability.

How do you see the role of government initiatives like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) evolving, and what impact do you anticipate these will have on fintech-driven MSME lending?

Government programs like CGTMSE are transformative for MSME lending, offering collateral-free loans up to INR 10 million and guarantees for lenders. By reducing financing risks, CGTMSE boosts confidence among banks and fintechs, enabling them to provide more innovative and flexible financial solutions. This drives growth and fosters a more inclusive credit ecosystem. Such initiatives are crucial for expanding access to credit, supporting MSME growth, and fueling broader economic development.

Can you share your vision for Niyogin Fintech Limited and how it has evolved since its inception?

Niyogin Fintech Limited’s vision has always been to empower small businesses (MSMEs) with a cost-efficient, technology-driven support system. Since our inception, we have focused on serving underserved economic segments, achieving notable success. Our impressive revenue growth in FY 24—over Rs.1900 million—reflects our strategic partnerships, alliances, and adaptability to market conditions. As we enhance our offerings and expand our reach, our mission evolves to deliver innovative solutions that support MSMEs and drive sustainable growth. We remain committed to creating significant value for our clients and stakeholders through continuous innovation and dedicated service.

How is Niyogin addressing the financial inclusion gap in India, particularly for MSMEs?

Niyogin is bridging India's financial inclusion gap by using a partnership-led model to support MSMEs. By collaborating with financial intermediaries, including financial professionals, Niyogin provides low-cost access to essential financial services. Their tech-enabled platform, NiyoBlu, facilitates digital credit delivery and offers payments, insurance, and investment services, enhancing lending capabilities. Niyogin’s revenue model is transaction-based, earning fees or commissions through NiyoBlu. This approach efficiently extends credit and additional financial services to MSMEs, promoting their growth and integration into the financial system.

This comprehensive strategy supports MSMEs in accessing capital and becoming part of a broader financial ecosystem.

Can you elaborate on Niyogin's core products and services, and how they cater to the needs of your target audience?

We are dedicated to serving the MSMEs through our partnership-led model. We work with multiple financial professionals to get low cost access to the MSME sector. Through our tech-enabled platform, we offer digital credit delivery alongside additional financial services such as payments, insurance, and investment plans, complementing our lending business. This approach, promoting asset-lightness and cost-effective market reach, underscores our commitment to fostering digital engagement models to deliver superior solutions to the MSMEs.

How does Niyogin stay ahead of technological advancements in the fintech space?

Niyogin leads fintech with a technology-first approach and a strong partner network, supporting MSMEs through a holistic platform offering financial inclusion, credit, investments, and SaaS services. Their digital platform, NiyoBlu, uses AI and ML to streamline loan applications, reduce costs, and boost efficiency. These innovations enable Niyogin to offer microloans to underserved segments, including small business owners with limited access to traditional banks, keeping them at the forefront of fintech while meeting evolving client needs.

What challenges do you foresee with regulations, and how is Niyogin preparing to address them?

As regulations evolve, fintechs do face challenges in compliance complexity. To address this, they are investing in advanced compliance technology and legal expertise. Data security and privacy concerns are prompting enhancements in cybersecurity and alignment with data privacy laws. Transparency and fair lending regulations are being met by improving loan

documentation and disclosure practices. The shift to digital KYC requires advanced verification systems, leading Niyogin to adopt cutting-edge digital tools and automation for streamlined onboarding.

Can you discuss Niyogin's financial performance over the past year and your expectations for future growth?

Over the past year, Niyogin has focused on strengthening its market presence and expanding its customer base. We have successfully capitalized on cross-selling opportunities within our existing clientele and actively pursued new customers who can benefit from our comprehensive range of financial products.

Looking ahead, our primary goal for FY2025 is to achieve sustainable profitability. We are committed to navigating the evolving business environment and leveraging our integrated offerings to drive growth. By enhancing our market reach and optimizing our product lineup, we aim to deliver significant value to all stakeholders and ensure long-term success for the organization.

What are your long-term aspirations for Niyogin Fintech Limited, and where do you see the company in the next decade?

At Niyogin Fintech Limited, our vision is to lead the fintech industry by transforming financial services for MSMEs. Over the next decade, we aim to be a global fintech leader, offering a broad range of digital solutions tailored to small and medium-sized enterprises. We plan to enhance our technological capabilities with advanced AI and data analytics for more personalized lending. We also aim to capitalize on new markets, share resources, and drive innovation by expanding globally and forming strategic alliances. By adapting to regulatory changes and leveraging emerging technologies, we seek to set new standards in financial inclusion and efficiency, driving substantial growth for MSMEs and solidifying our industry leadership.

The current economic climate has tightened access to traditional credit for MSMEs, with high interest rates, economic uncertainties, and stricter lending standards posing significant challenges. Fintech companies are stepping in to address these issues by leveraging alternative data, such as digital transactions and GST filings, to assess creditworthiness more accurately.

This enables them to offer tailored financial solutions that traditional banks might overlook, bridging the financing gap and supporting MSMEs' growth during these challenging times.