Introduction

A critical key to success for any business is in discovering opportunities in crisis. Here the crisis is the ongoing coronavirus pandemic. Human lives are lost. Lockdowns have been imposed across the world. Factories were shut. Offices were closed. Livelihoods ceased. To control the spread of the virus, people remained at home. Essential services were delivered at the doorstep, with a distance. Payments for goods were made contactless. From here sprang the opportunities in the crisis. Financial transactions fast-paced through various digital modes viz payment made from Digi wallets or by scanning QR code or direct transfer to account or through cards only. Now businesses have restarted though demand for finished goods, especially that of the non-essential products is tepid, the supply of raw material is subdued. The entire value chain is disturbed. The net worth of businesses got depleted during Covid-19-induced shutdown. So now enterprises need capital to resume their activities. Big businesses may still have reserves to persevere further, but the MSMEs are searching hastily for an emergency credit line to meet their ends.

MSME, the backbone of India’s fast-growing developing economy contributing to 38 percent of GDP nearly half of the country’s total exports and 21 percent of overall employment have been the worst-hit by the pandemic-resultant lockdown. Taking into account the world economy, the SMEs comprise 90 percent of business and more than 50 percent of employment worldwide. In the countries of the Association of Southeast Asian Nations (ASEAN), the SME comprise more than 98 percent of the total number of enterprises and contributes nearly 40 percent of the comprehensive GDP of these countries taken together. Covid-19 is pulling down the world economy to its decade-low levels. Among all other fall-outs of the pandemic, the small business segment which is particularly vulnerable to any economic unrest is suffering the hardest. Uncertainty is lurking over the estimated and projected cash flows of the future, exhausting the credibility to receive funding from traditional financial institutions. Amid these uncertainties, few harbingers of hope have appeared to the MSME community. They are the new-age fintech startups who have turned the ongoing catastrophe into an opportune time for them. And today’s tech-savvy netizens, equipped with a smartphone are managing the much-needed credit support from a series of new entrants in the fintech field. Though many businesses are still dependent on the pawnbrokers from the informal financial sector or from the kith and kin where the fees for funds are exorbitantly high, the present-day digital solution providers are coming in to rescue to this vulnerable sector of the economy to a large extent. They have the expertise in providing loans end-to-end digitally mostly through an easy-to-use mobile app, and the enterprise is receiving finances with a few swipes in their mobiles fully contactless and with no documents submitted in person. These days, the populace of tier 3 and 4 cities is also well acquainted with the usage of mobile phones and the internet. Therefore, the credit facilities offered by these digital lenders are now easily available to all the businesses across the country blurring the divide between the metro and non-metro centres for affordable liquidity.