In the first part of this story, we looked at how MSMEs require much more than access to credit. From collecting payments and managing cash flow to financing equipment and accessing formal credit, businesses rely on an interconnected financial ecosystem to operate efficiently.
Several smallcap companies are part of the financial ecosystem that makes all this possible. While some provide payment infrastructure, others focus on data-driven lending, productive asset finance or financial inclusion. Together, they represent different ways of participating in India’s evolving MSME economy.
The MSME finance stack
Several structural trends are creating opportunities for companies serving the MSME ecosystem. The continued formalisation of businesses through GST and Udyam registration, rising digital payment adoption, greater availability of transaction data, expanding digital infrastructure, and the increasing adoption of AI in enterprise operations are reshaping how MSMEs access and use financial services.
As MSMEs become more digitally-savvy, the demand for integrated payment, lending and business management solutions is likely to grow, creating layers of opportunities across payments, lending and financial inclusion. Here’s a broad overview of some featured smallcaps and what they do.
| The problem | The solution provider | What they do |
| Digital payments and enterprise automation | AvenuesAI | Payment infrastructure and AI |
| Cash-flow based lending | UGRO Capital | Technology-led MSME lender |
| Secured MSME lending | SBFC Finance | Business loans |
| Asset finance | MAS Financial Services | Vehicles, equipment and MSME loans |
| Financial inclusion | Satin Creditcare | Micro-enterprise lending |
SBFC Finance Ltd: NBFC focused on MSME Loans
SBFC Finance is a non-banking finance corporation that specialises in secured MSME loans and loans against gold. Amongst companies that cater to MSMEs, SBFC has one of the highest AUM (Assets Under Management) growth rates in the industry. Secured MSME loans make up 81% of the company’s business, with a vast network of 230 branches covering 181 cities across 17 states and 2 union territories.
How they support MSMEs:
- Working capital loans
- Business expansion finance
- Property-backed business loans
- Digitised loan processing
- Credit for underserved entrepreneurs
AvenuesAI: The digital payment leaders
Formerly known as Infibeam, AvenuesAI has positioned itself as a software development services company, focused on maintenance, web development, payment gateway services, e-commerce and other ancillary services. They are the market leader in India’s digital payments sector, with an 8% market share, operating as a payment processor for online merchants, websites, and commercial users (charging a fee on successful transactions). The company’s most well-known offerings include CCAvenue (payment aggregator) and BillAvenue (bill payment processor).
How they support MSMEs:
- Merchant payment infrastructure
- Digital payment acceptance
- Enterprise commerce software
- AI-powered customer engagement
- Workflow automation
- Business intelligence from transaction data
MAS Financial Services Ltd: Productive asset finance specialists
MAS is an NBFC that offers retail financing products for MSME, home, two-wheeler, car and commercial vehicle loans. Its business mix constitutes micro-enterprise loans and SME loans which make up approximately 40% and 35% of its AUM mix, with two-wheeler and commercial vehicle loans constituting roughly 7% each. MAS operates in 13 states and union territories, with Gujarat as its largest market. Expansion is underway across the west, south and central India in Rajasthan, Maharashtra, Karnataka, Tamil Nadu, Madhya Pradesh and other states.
How they support MSMEs:
- MSME finance
- Commercial vehicle finance
- Two-wheeler finance
- Productive asset finance
- Partnership-led lending
Satin Credit Care: Micro-enterprise lending specialists
Satin Network Limited (SCNL) is a microfinance institution with operations spanning 23 states and Union Territories and a network covering over 95,000 villages. Beyond microfinance, the company offers MSME loans through its non-MFI portfolio, housing finance through its subsidiary, and business correspondent services via its wholly owned subsidiary, Taraashna Financial Services Limited.
How they support MSMEs:
- Micro-enterprise loans
- Small business finance
- Credit for first-time entrepreneurs
- Financial inclusion
- MSME lending through subsidiaries
Ugro Capital
Ugro is a technology-led NBFC focused exclusively on MSME lending. The company uses its proprietary underwriting framework, called GRO Score™, to analyse GST cash flows, banking behaviour, and counterparty data to create a comprehensive borrower credit profile and deliver credit approval or rejection decisions within 60 minutes. Ugro’s technology is supported by a wide distribution network to offer customised credit solutions to borrowers.
How they support MSMEs:
- Working capital finance
- Machinery and equipment finance
- Embedded lending
- Cash-flow-based underwriting
- Supply-chain finance
- Lending through fintech and distribution partners
Microfinance, macro opportunity?
The long-term opportunity is not just about lending more money to MSMEs. It is about building the infrastructure that enables businesses to collect payments, access credit, finance productive assets, automate operations and make better financial decisions. As India’s MSMEs become more formalised and digitally connected, these capabilities could become increasingly important for improving productivity and supporting business growth. And, with over 60 million MSMEs continuing to formalise and digitise, these companies may
emerge as the key enablers of this transformation.
Sources
MAS Financial Services Ltd: Screener
Satin Creditcare Network Ltd share price