SMFG India Credit has partnered with digital payments platform PhonePe to offer collateral-free loans to micro-merchants, with a particular focus on Tier-2 and Tier-3 cities. The initiative aims to expand financial inclusion by providing small business owners with easier access to credit, enabling them to grow their businesses and manage working capital more efficiently.

The partnership leverages PhonePe’s extensive merchant network, allowing eligible micro-merchants to apply for loans seamlessly through the platform. By integrating digital credit solutions with everyday business transactions, the initiative simplifies borrowing processes and reduces barriers for underserved entrepreneurs.

Officials highlighted that the program targets merchants who may not have access to traditional banking channels or formal credit histories. Through data-driven underwriting and technology-enabled evaluation, SMFG India Credit can extend timely financial support while mitigating risks.

The loans are designed to help micro-merchants invest in inventory, expand operations, and adopt digital tools for business management. The collaboration also aligns with broader efforts to strengthen India’s MSME sector, which plays a crucial role in employment generation and economic growth.

Analysts note that partnerships between fintech companies and financial institutions are increasingly shaping credit accessibility in India. By combining PhonePe’s reach with SMFG India Credit’s lending expertise, this initiative exemplifies how digital solutions can democratize financial services and empower small businesses.

The program is expected to impact thousands of micro-merchants across smaller towns and cities, promoting entrepreneurship and boosting economic activity at the grassroots level. By facilitating easy, collateral-free loans, SMFG India Credit and PhonePe aim to drive inclusive growth and reinforce the digital financial ecosystem in India.