Unlock Your SME Growth with BNPL

Around 75 million businesses make up India’s MSME sector. According to available data, this sector contributes to one-third of the country's GDP. Naturally, small businesses have immense importance when it comes to ensuring the sustainable development of the country’s economic future.

A business owner looking for ways to expand the scope of client outreach can get SME growth with BNPL from trustworthy fintech platforms like KredX. The Buy Now Pay Later industry has emerged as a ground-breaking approach toward a fully digitised transaction model. An API-integrated and user-friendly interface has been beneficial to both the merchants and buyers in business-to-business dealing.

Why Are SMEs Showing Interest in the BNPL Programme?

Many small business owners are turning towards NBFCs for a short-term funding solution because of their lack of access to formal credit. These businesses often lack collateral or assets to get funds sanctioned from traditional lenders. SMEs are usually considered high-risk borrowers by these financial institutions.

Of the 110 million people employed in this sector, only 16% can avail formal credit. This structural exclusion of the MSMEs from the credit ecosystem hinders their chance of improving creditworthiness. This, in turn, further negates their chance of obtaining a business loan down the line.

The BNPL model, on the contrary, offers a relatively lenient framework, allowing a vast majority of the SMEs to be eligible for funding from financiers. BNPL for SMEs is quintessential in solving the liquidity issue faced by MSMEs. These businesses need to buy raw materials from other businesses to cater to their trade's basic requirements.

However, as they do not have an unrestrained cash flow, unlike their blue-chip counterparts, small businesses might struggle to continue their proper functioning. Fintech companies, under this model, work as financial intermediaries to provide the immediate working capital boost necessary for the businesses.

SME growth with BNPL is possible as these financiers work on behalf of business sellers offering an upfront payment of the total selling price on behalf of their B2B clients. These small and medium enterprises get a flexible window to reimburse the financiers via instalments over a stipulated period.

It must be noted that according to an International Labour Organisation (ILO) survey, 9 out of 10 small businesses have struggled during the volatile market condition following the COVID-19 pandemic. With proper funding via BNPL, SMEs are capable of overcoming these obstacles.

How Can BNPL for SMEs Revitalise Small Businesses?

As a viable supply chain-based financing solution, Buy Now Pay Later is capable of extending revolving credit to most MSMEs. This allows for cost reduction for such businesses via process optimisation. As BNPL providers rely on alternative credit data, they can assess the creditworthiness of the borrowing entity with higher accuracy compared to most institutionalised lenders.

Even other than the aforementioned liquidity solution, there are various crucial ways how SME growth with BNPL is palpable in the current business climate, such as:

  • Business buyers can easily sign up for this scheme in a hassle-free manner. It offers a simpler documentation process without any complicated paperwork, which is helpful for SMEs. Its digital application process leads to zero time wasted, as businesses can fill up the KYC form and continue to purchase almost immediately.
  • The lending protocol doesn't require collateral, so in effect, it functions like any other unsecured consumer loan. So, this has the potential to be a cost-effective alternative to opting for business credit cards for small businesses.
  • When it comes to credit cards, borrowers also get a hefty financial burden due to maintenance fees, cash advances and GST. With BNPL for SMEs, businesses do not have to worry about these additional costs.
  • Thus, BNPL can be a viable alternative to credit cards as the business owners can avoid spending a hefty sum against missed payments, the interest rate on which can go up as high as 48%. For Buy Now Pay Later services, the interest rate usually stays between 0% – 25%.

Bottom Line

The BNPL market has continued to boom exponentially in recent times, with the sector being projected to grow tenfold soon. As the demands of the global marketplace continue evolving, many small businesses will opt for BNPL services to get funding necessary for making a mark in the competitive sphere.

BNPL for SMEs is an essential tool for resolving budget crunch issues as it allows them to access working capital needed to buy materials or pay wages. Its embedded financing facility is easily integrated into the merchant website so that small businesses can use this point-of-sale credit as a viable payment option.

Its transparent and time-efficient fund disbursal is also why this service has gained significant momentum in recent economic discourse. Additionally, businesses with no collateral, low credit scores, or New-to-Credit [NTC] borrowers can access proper funding via BNPL. Small businesses which pay off small-ticket loans within the repayment schedule can also improve their creditworthiness simultaneously.

So, as end-to-end automated and personalised transaction methods become predominant, leading FinTech services like KredX will continue offering BNPL services. With digital migration, both small and large businesses would get the benefits of seamless transactions.


In most cases, MSMEs need to be functional for at least six months to avail Buy Now Pay Later financing.

MSMEs with a CIBIL score above 650 are eligible for BNPL solutions. However, NTC businesses too can get this service.

A business buyer can reimburse the BNPL provider via virtual bank account number, UPI, payment links, etc

Leading fintech services allow the borrowers to transact multiple times daily, without limit. However, a buyer must utilise the sanctioned limit available to them via BNPL for SMEs.