Despite rapid advancements in India’s digital payments infrastructure, the country’s Micro, Small, and Medium Enterprises (MSMEs) continue to face a severe financing shortfall.
According to a report released at the Global Fintech Fest by Bain & Company and NPCI Bharat BillPay Limited (NBBL)—titled India’s Next Growth Frontier: B2B Commerce, Payments, and Credit—India’s MSME sector is grappling with a staggering formal credit gap exceeding ₹60 lakh crore (~$720 billion).
While India has successfully digitized consumer payments and individual business tools, deep-rooted fragmentation in B2B workflows continues to block capital flow, delay payments, and stall enterprise growth.
The report highlights a widening divide between credit demand and formal lending supply across India’s business landscape:
- Total Debt Demand: ~₹92 lakh crore
- Formal Credit Supplied: ~₹34 lakh crore
- The Formal Credit Gap: ~₹60 lakh crore
Smaller enterprises; micro and small businesses are disproportionately impacted by this shortfall. Traditional institutional lending channels satisfy only 30% to 40% of their total credit demand.
Because small businesses often lack substantial physical collateral, conventional underwriting models routinely exclude them, pushing many toward high-cost informal financing.
The Dual Strain: Delayed Receivables & Reconciliation Bottlenecks
The financing crunch is compounded by friction in trade receivables and manual back-office processes:
- ₹8 Lakh Crore Trapped in Delayed Payments: An estimated ₹8 lakh crore in receivables owed to MSMEs remains locked due to payment delays. These delays are frequently triggered by information mismatches—such as unconfirmed delivery notes, conflicting purchase order details, and fragmented communication between buyers and sellers.
- Heavy Operational Drain: Corporate finance teams across India spend 30% to 40% of their bandwidth on routine administrative tasks, including manual invoice matching, payment reconciliation, exception handling, and follow-ups.
The Solution: A Centralized, Interoperable Digital Layer
To unlock liquidity for small businesses, Bain & Company and NBBL propose establishing a central, interoperable digital ecosystem anchored by standardized APIs.
Rather than building isolated applications, this interoperable framework would seamlessly connect business ERPs, commercial banks, non-banking financial companies (NBFCs), payment providers, and public databases like GSTN.
Key Capabilities of an Interoperable B2B Layer
- Automated Invoice Reconciliation: Digitally connecting the 20+ crore monthly GST e-invoices generated in India to streamline order-to-cash workflows.
- Cash-Flow-Based Underwriting: Converting buyer-confirmed invoices into verifiable digital assets. This enables lenders to shift away from physical collateral toward cash-flow-driven credit models.
- AI-Powered Analytics: Utilizing advanced analytics and agentic AI for real-time cash-flow intelligence, dynamic risk scoring, and automated credit underwriting.
Macro Impact: Fueling the “Viksit Bharat” Vision
| Metric / Theme | Current Benchmark | Proposed Digital Solution |
| MSME Credit Gap | ~₹60 Lakh Crore gap (only 30%–40% demand met for small firms) | Cash-flow-based underwriting via verified e-invoices |
| Stuck Receivables | ~₹8 Lakh Crore in delayed payments | Interoperable invoice matching & trusted delivery confirmation |
| Finance Bandwidth Drain | 30%–40% time spent on manual reconciliation | Automated reconciliation across 20+ crore GST e-invoices |
| Lending Approach | Asset/Collateral-based lending | AI-driven dynamic risk scoring and transaction visibility |
India’s formal business sector represents an economic engine generating over ₹130 lakh crore in activity, contributing approximately 45% of the nation’s Gross Value Added (GVA).
Resolving B2B workflow fragmentation and bridging the ₹60 lakh crore credit gap could drastically improve capital velocity and operational efficiency across supply chains. By establishing a unified digital operating system for B2B trade, India can empower its millions of MSMEs to serve as the key driver toward its target of becoming a fully developed economy (Viksit Bharat).
By Dr Mohit Rana, CEO, Infomerics Analytics & Research Pvt Ltd