Meet The Fintech Startups Redefining Business Lending In India

Minimum documentation. Faster processing. Easy access to credit. No wonder, fintech startups have transformed the face of business in underserved markets and unveiled a world of possibilities for small and medium enterprises by making these promises a reality. 

For the ubiquitous MSMEs (micro, small, and medium enterprises), securing business loans from traditional banks have always been a challenge because of heavy paperwork, strict lending criteria, and lengthy processes. 

Fintechs discovered the sweet spot in this. They have bridged the gap by leveraging technology and making the entire lending process simpler. 

Fintech startups working in sync with the government’s push for financial inclusion, offering digital payments, lending, and supply chain finance solutions are gaining traction among investors. In recent years, startups offering business loans have attracted significant venture capital (VC) funding. 

The fintech sector became the top choice for investors in 2024, cornering the largest slice of the funding pie. According to an Inc42 analysis, domestic fintech startups raised over $2.5 Bn last year with the number of deals rising 23% to 162 from 132 a year ago.

The lending tech segment, which is likely to surpass $1.3 Tn this year, continued to lead the fintech revolution, bagging $1.7 Bn, or 68% of the total funding, in 2024. AI-driven credit assessments, streamlined digital platforms, and alternative lending models have helped these startups offer faster, more flexible loan options tailored to the unique needs of businesses. 

While fintech startups breathe fresh life into small businesses, the government’s push to bridge the credit gap paves the way for their success. In the 2025 budget announcement, the government doubled the credit guarantee coverage for startups and MSMEs to INR 10 Cr and INR 20 Cr.

The fintech sector plays a crucial role in complementing the government’s efforts to provide financial support and mitigate lending risks for businesses. By leveraging technology, these startups offer quick and digital lending solutions, simplifying the process for businesses to access credit. 

Inc42 picked up nine leading fintech startups that are transforming loan accessibility for businesses and driving innovation in the lending space.

Note: This is not a ranking of any kind, and the companies are listed alphabetically.

1. Arthan Finance

Founded by Kunal Mehta, Pravash Dash and Gowrisankar Rao Alamanda in 2018, Arthan Finance provides loans to self-employed nano and micro entrepreneurs in tier II, III and IV cities across states. 

The startup uses underwriting systems based on artificial intelligence and machine learning.

It claims to have provided more than INR 600 Cr of loans to over 20K borrowers, with the loan size varying from INR 2,000 to INR 20 Lakh.

The Mumbai-based fintech startup raised INR 50 Cr as part of its Series B funding round led by Incofin India Progress Fund with participation from Michael & Susan Dell Foundation in June 2024. 

Arthan Finance has raised over $8.49 Mn in funding till date with backing from founders, angel investors such as Sunil Gulati and Ajit Ranade and Michael and Susan Dell Foundation.

2. Aye Finance 

A brainchild of Sanjay Sharma and Vikram Jetley, Aye Finance offers loans to small businesses across the country. It uses cluster-based credit assessment with AI algorithms to assess risk in the absence of usual business documents.

Aye Finance has disbursed INR 10,768.40 Mn in fresh loans and INR 9,114.24 Mn in repeat loans to its borrowers since its inception in 2014. 

The non-bank lender is gearing up to raise INR 1,450 crore from a public float after the board cleared its IPO proposal last December. The initial public offering of Aye Finance will be a combination of INR 885 Cr fresh shares and an INR 565 Cr offer-for-sale (OFS) from existing shareholders.

The company last month secured INR 110 Cr (around $12.8 Mn) in debt from a clutch of investors like Northern Arc, ASK Financial Holdings, MAS Financial Services and CredAvenue.

Aye Finance had in the first half (H1) of FY25 reported a 37% jump in its net profit to INR 107.8 Cr, while its operating revenue climbed to INR 692.24 Cr from INR 472 Cr a year ago.

3. Clix Capital

Pramod Bhasin and Anil Chawla set up Clix Capital to provide business loans, loans against property, school financing, and so on. For businesses, it offers SME/MSE loans, working capital loans, unsecured business loans, and so on.

Set up in 2016, the Delhi NCR-based non-bank lender claims to have given away more than INR 26,000 Cr credit to borrowers till August 2024. The company raised INR 220 Cr in a funding round led by existing investors Apollo Global Management and its founders Bhasin and Chawla last August. 

In 2023, Karnataka Bank Ltd (KBL) and Clix Capital entered a partnership to provide loans to the MSME sector via digital platform Yubi Co (formerly known as CredAvenue). 

Clix Capital has so far raised more than $212.20 Mn in funding from its investors. 

The company’s standalone revenue stood at INR 679 Cr in the financial year 2022-23 (FY23) and at INR 637.5 Cr in FY22. The NBFC posted a profit of INR 24.4 Cr in FY23 as against a loss of INR 93.3 Cr in FY22.

4. CredAble

MSME-focussed fintech startup CredAble came up in 2017 to offer solutions to financial growth and lending needs. The fintech startup, founded by Nirav Choksi and Ram Kewalramani, claims to provide an all-in-one credit, trade and cash management platform for small entrepreneurs to manage and grow their businesses.

The fintech lender enables $11 Bn in working capital every year and so far helped more than 3 Lakh small business loan borrowers, 125 enterprises and over 35 large financial institutions. 

It has raised more than $71.91 Mn in funding to date and counts Oaks Asset Management, Plutus Wealth Management LLP and Axis Bank Limited among its investors. CredAble raised INR 30 Cr in debt funding from Small Industries Development Bank of India (SIDBI) in June 2024. Two years before that, it raised $9 Mn from Axis Bank and OAKS Asset Management to offer credit solutions to SMEs and large businesses.

In FY23, its operating revenue stood at INR 23.7 Cr and net loss at INR 22.2 Cr.

5. Finova Capital 

The husband-wife duo Mohit Sahney and Sunita Sahney rolled out Finova Capital in 2016 as a non-banking finance company for offering business loans to MSMEs as well as home loans within a range of INR 3 Lakh to INR 25 Lakh in semi-urban and rural areas.

It claims to have assets under management of INR 3,000 Cr, which represents a five-year CAGR of more than 60%. In 2023-24, Finova Capital disbursed INR 1,349 Cr in loans as compared to INR 897 Cr in the previous fiscal year. 

The Jaipur-based startup last October secured $135 Mn in a Series E funding round from the likes of Avataar Venture Partners, Sofina and Madison India. Finova Capital has raised more than $276.00 Mn in funding till date and counts Norwest Venture Partners, Maj Invest, Faering Capital and Peak XV Partners among its investors.

The NBFC claimed that its consolidated profit after tax reached INR 151.5 Cr in FY24, surging 71% from INR 88.4 Cr a year back. Its revenue from operations jumped 59% to INR 529.3 Cr from INR 332.6 Cr in this period.

6. FlexiLoans

Founded in 2016 by Deepak Jain, Ritesh Jain and Manish Lunia, FlexiLoans is an online lending platform that targets SMEs and other underserved segments to provide quick and flexible loans. 

FlexiLoans offers both term loans and supply chain business loans, with term loans making up 70% of its business. It also claims to have over 100 ecosystem partners who give them business leads. 

The fintech startup claims to have disbursed over INR 7,000 Cr in loans across over 2,100 towns and cities. 

The Mumbai-based startup raised INR 290 Cr last September as part of its Series C funding round from a clutch of investors, including Accion, Maj Invest, Nuveen and Fundamentum. FlexiLoans has raised more than $182.94 Mn in funding till date and counts the likes of Denmark-based MAJ Invest, and the UK-based Fasanara Capital among its investors. 

In FY23, the NBFC garnered INR 109.73 Cr in revenues, Inc42 was told.

7. Indifi Technologies 

Indifi, founded by Siddharth Mahanot, Mittal and Sudeep Sahi in 2015, offers credit solutions to underserved businesses. It aims to streamline loan processes for SMBs by connecting them with multiple lenders. 

Indifi reported a net profit of INR 5.1 Cr in FY23 as against a loss of INR 32.8 Cr in FY22. This was its first profit for the full year. Revenue from operations more than doubled to INR 198 Cr in March 2023 from INR 96 Cr, and Mittal is confident about maintaining this growth rate in FY24 as well.

With 80 active partners across 400 cities, Indifi claims to have disbursed more than 100K loans to various businesses. 

The company last raised INR 290 Cr in its Series E funding round led by funds managed and advised by ICICI Venture. Indifi has raised more than $120.16 Mn till date and counts the likes of British International Investment, OP Finnfund Global Impact Fund I, Omidyar Network India, Flourish Ventures and CX Partners among its investors.

Indifi’s cofounder Mahanot stepped down from his executive role at the lending tech company in October 2024, ending his nine-year stint. Before that in 2023, the company  announced the appointment of the former Axis Bank president Sangram Singh as its CEO.

8. Lendingkart 

Launched in 2014 by Harshvardhan Lunia and Mukul Sachan, Lendingkart disburses loans to MSMEs. The startup has two main revenue sources – income from interest and financial services. It claims to have disbursed 3 Lakh loans worth over INR 18,700 Cr since inception. 

The Ahmedabad-based startup turned profitable in 2022-23 with a consolidated net profit of INR 118.8 Cr as against a net loss of INR 203.4 Cr in the prior fiscal. In FY24, it reported a 97.2% decline in its consolidated net profit to INR 3.25 Cr from INR 118.8 Cr in FY22, primarily due to a sharp spurt in impairment loss on financial assets, loans and advances.

The startup raised $10 Mn through external commercial borrowings from a fund managed by Swiss impact investor BlueOrchard in May 2024. 

Lendingkart has raised more than $340.37 Mn in funding till date and counts the likes of  Bertelsmann, Mayfield India, Saama Capital, Sistema Asia, and India Quotient as its investors.

In October 2024, Lendingkart said that its existing investor Fullerton Financial Holdings (FFH) will acquire a controlling stake in the startup with an additional investment of INR 252 Cr. FFH is a wholly owned portfolio company of Singapore-headquartered Temasek.

9. NeoGrowth 

Dhruv Khaitan and Piyush Khaitan founded NeoGrowth in 2013 to provide tailored credit solutions to small and medium-sized businesses across 70-plus segments. The lending tech platform’s offerings range from vendor financing to retail-focused loans. 

It offers loans in the range of INR 10 Lakh to INR 70 Lakh, with tenure ranging from 24 months to 36 months. The company in its FY23-24 annual report claimed to have disbursed more than 12K Cr Loans to over 1,50,000 MSMEs till then. 

NeoGrowth has partnered fintech startups like PineLabs, BharatPe, IndiaLends, and BuddyLoans to disburse the loans. 

NeoGrowth’s profit jumped 313% to INR 71.7 Cr in FY24 from INR 17.26 Cr in the previous fiscal, while its operating revenue grew 57% to INR 599 Cr from INR 380 Cr in FY23. 

The Mumbai-based startup in July 2024 raised $11.2 Mn in debt from impact investment firm Symbiotics Group. It has raised more than $219.01 Mn in funding till date and counts the likes of Dutch development bank FMO, Development Finance Corporation (DFC), Omidyar Network, and Lightrock among its backers.