RBI selects ZikZuk for MSME lending trial

Mumbai: ZikZuk Technologies, which is into resolving credit challenges faced by MSMEs, has been selected by the RBI for the 'test phase' for MSME lending as part of the third cohort under RBI's Regulatory sandbox.

It was in September, when RBI announced the opening of the third cohort under the regulatory sandbox for MSME lending. The other entities that have been selected are FinAGG Technologies, Moshpit Technologies, Mynd Solutions, New Street Technologies, Rupifi Technology Solutions, Small Industries Development Bank of India (SIDBI), and SysArc Infomatix. These entities are supposed to start the testing of their products this month itself.

Regulatory sandbox refers to live testing of new products or services in a controlled/test regulatory environment for which the regulators may permit certain relaxations. The Reserve Bank had received 22 applications for the cohort and shortlisted eight for the same.

A cohort for SME lending will expected to fill the lending gap for small and medium entrepreneurs through the innovative use of technology and data analytics. ZikZuk will be testing its innovative product 'business finance manager' to enable unsecured cash flow-based model that will open up a massive opportunity to enable credit for NTC (new to credit) and thin-file customers. 'Business finance manager' integrates with MSMEs accounting software, and banking ecosystem and uses its proprietary analytics engine to empower MSMEs with insights on sales, cash flow, payables, receivables, etc. It also enables lenders to make data-driven decisions to provide their contextual credit to MSMEs.

Talking to Bizz Buzz, Tarun Bansal, co-founder, ZikZuk, said: "As MSMEs will play an imperative role in $5 trillion economy, we empower MSMEs in their business growth by enabling intelligent business solutions. We look forward to enable a cash flow based assessment for MSME credit in India."