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Alternative lending to merchants in India should be exploding with growth,

but the sector faces key challenges to unlock potential

Source: RedSeer Consulting, “E-Seller Financing in India”, December 2016

• FinTech alternative lending to merchants has seen hectic

investment activity in India from 2015-16

• MSME adoption has been lower than expected due to inherent

challenges across the lending value chain21

Key Business Challenges

Customer

experience

Business

development

Underwriting

Product

features

Disbursal &

collection

Investment in Alternative Lending (2015-16)

a

b

c

d

e

- Cultural resistance to credit

- Lack of organized information on

registered businesses

- Lack of financial data for risk assessment

- Low awareness about complex loan

vehicles

- Low comfort with technology

US$ ~220 M