Scaling MSME Disbursements 300% with an Embedded Finance Stack
How a 135-year-old Kerala-headquartered NBFC with 3,700+ branches built a digital MSME credit product on top of QR payment platforms — and grew disbursement value 3x.
Scaling MSME Disbursements 300% with an Embedded Finance Stack
How a 135-year-old Kerala-headquartered NBFC with 3,700+ branches built a digital MSME credit product on top of QR payment platforms — and grew disbursement value 3x.
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growth in MSME disbursement value enabled by instant credit delivery embedded into the merchant's daily transaction flow.
Built for credit teams. No paywall, no sales follow-up unless you ask.
The challenge
Why MSME credit is structurally underserved
No formal financial records
A large share of MSMEs run on cash transactions with limited or no formal bookkeeping. Bureau checks and tax records often fail to capture the true financial health of these businesses — leaving lenders without reliable data to assess creditworthiness.
No acceptable collateral
Many business owners do not have tangible assets that banks accept as collateral. This structural gap locks out a vast pool of otherwise creditworthy entrepreneurs who depend on unsecured working capital.
Small-ticket loans are uneconomical
Manual, paper-heavy underwriting and in-person verification make small-ticket MSME loans uneconomical for lenders — translating to higher interest rates and longer turnaround times for borrowers.
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Outcomes
What the Merchant EDI program delivered
85% approval rate, 52% growth in user acquisition
Real-time transaction data and machine-learning underwriting lifted approval rates to 85%. Median user-acquisition growth across QR payment platforms: 52% — driven by high-intent merchant segments reached directly via the platforms.
1,50,000+ businesses funded
More than 1.5 lakh businesses have been onboarded into the EDI program — driving the ambitions of micro and small enterprises across India.
<6 weeks to market
Time to market for a fully integrated STP onboarding journey was less than 6 weeks — cutting the usual lead time by more than half — while NPA dropped thanks to the daily-repayment model surfacing early borrower-behaviour signals.
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How it was built
What FinBox built for the NBFC
India's MSME sector has 60 million-plus enterprises contributing 31% of GDP. But informal micro-enterprises operate outside traditional banking systems, with no formal records, limited collateral, and high processing costs that make small-ticket loans uneconomical. This case study walks through how a legacy Kerala NBFC — backed by 135 years of parent-group legacy and serving 10 million customers — partnered with FinBox to build a Merchant EDI lending product that meets MSMEs inside their daily payment flow on PhonePe, Paytm, and BharatPe.
Instant STP onboardingFinBox's Merchant EDI Stack enabled fully digital Straight-Through Processing onboarding journeys, eliminating user-acquisition friction. MSMEs apply, qualify, and receive disbursals directly inside the QR platforms they already use.
Embedded daily repayment (EDI)Equated Daily Instalments tailored to MSMEs' daily cash flows. Auto-debit collection workflows integrated with QR payment platforms enable smooth repayment and improved discipline — without the friction of monthly EMIs.
Data-driven underwritingReal-time transaction data from QR platforms feeds machine-learning models that automate credit scoring. Document-light underwriting let the NBFC deploy 31 unique credit policies across three partner platforms in one year.
Partnership and program managementThe FinBox Partnership Lending Stack handles drop-off management, compliance, reporting, and continuous performance optimisation — giving the NBFC oversight across every lending partnership through one control plane.
Built on existing railsThe product slots into PhonePe, Paytm, and BharatPe payment flows so merchants can borrow and repay where they already transact — no separate app, no new behaviour to learn.
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