Access to working capital remains one of the biggest obstacles facing India’s small business sector, despite rapid growth in digital payments. SG Finserve is seeking to address this challenge through a new partnership with BharatPe Money, launching a fully digital merchant lending solution designed specifically for MSMEs. Built in compliance with the Reserve Bank of India’s digital lending framework, the initiative combines paperless onboarding, cash flow-based underwriting and faster loan approvals to help small merchants secure formal credit with greater speed, transparency and regulatory protection.
Regulated non-banking financial company SG Finserve Limited has launched a digital lending solution tailored for small business owners in partnership with fintech platform BharatPe Money. The credit initiative operates through BharatPe Money, which is managed by Resilient Digi Services Private Limited and serves as the designated lending service provider. Concurrently, enterprise software firm Succesship Technologies Private Limited serves as the core technology partner powering the end-to-end digital credit architecture. The joint venture is designed to provide eligible micro, small, and medium enterprises (MSMEs) with paperless merchant loans characterised by minimal documentation requirements and accelerated approval cycles.
The programmatic lending setup is built to strictly align with the Reserve Bank of India (RBI) digital lending guidelines, prioritising consumer consent, data privacy, and fee transparency. Under the regulatory framework established by the central bank, outsourced lending service providers act as credit intermediation partners while the licensed financial institution retains ultimate accountability for customer grievance resolution. The statutory guidelines mandate that all loan costs, annual percentage rates (APR), and administrative fees be explicitly disclosed within a standardised key fact statement. Furthermore, to eliminate illicit processing hops, all loan disbursements and scheduled repayments must move directly between the borrower’s verified bank account and the regulated lender.
The strategic rollout targets a persistent financing shortfall across India’s merchant ecosystem, where small commercial vendors frequently struggle to secure short-term working capital through traditional branch banking channels. An RBI expert committee estimate highlighted in a Bank for International Settlements report placed the nation’s total MSME credit gap between 20 lakh crore rupees and 25 lakh crore rupees, representing approximately 21 billion dollars to 26 billion dollars in unmet capital demand. Through BharatPe’s extensive merchant acquisition network combined with Succesship’s automated onboarding stack, SG Finserve aims to deploy cash-flow-based underwriting models that expand formal credit access for new-to-credit entrepreneurs.
What it means for the industry
- Embedded finance continues to gain momentum, with regulated lenders partnering with fintech platforms to reach underserved MSMEs more efficiently.
- Cash flow-based lending is replacing traditional collateral-heavy models, allowing more small businesses to access formal credit using digital transaction data.
- RBI’s digital lending regulations are encouraging responsible innovation, ensuring transparency, customer consent and stronger consumer protections.
- Strategic fintech partnerships are becoming a preferred distribution model, enabling NBFCs to scale lending without building large physical branch networks.
- India’s MSME financing gap remains a significant growth opportunity, with digital lending expected to play a central role in expanding financial inclusion.
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