SMFG India Credit Partners with PhonePe to Offer Collateral-Free Credit

Source: ET

Context:

SMFG India Credit (SMICC), a Non-Banking Financial Company (NBFC), has partnered with PhonePe to provide collateral-free credit to merchants.

Key Highlights:

• Type of Credit: Merchant Cash Advance (MCA) loans for registered merchants on the PhonePe platform.
• Target Audience: Merchants in Tier-2 and Tier-3 towns, supporting small businesses in semi-urban and rural India.
• Objective: Strengthen SMICC’s role as a leading lender in the MCA space and improve access to working capital for small merchants.

Who are Micro-Merchants?

• Micro-merchants are very small business owners, usually self-employed or family-run enterprises, with low annual turnover (often below ₹50 lakh in India).
• They typically have 1–5 workers (sometimes just the owner) and operate at a neighborhood or community level.
• They form a subset of MSMEs (Micro, Small and Medium Enterprises), but at the smallest end of the spectrum.
• Example:
  • A kirana (grocery) shop in a small town
  • A street vendor selling vegetables or snacks