SIDBI and MonetaGo partner to secure MSME financing in India

The Small Industries Development Bank of India (SIDBI) has partnered with MonetaGo to deploy its digital public infrastructure solution for micro, small, and medium enterprises (MSMEs) in India. The aim is to reduce trade risk for MSMEs by providing them access to credit through secure, standards-based infrastructure.

This is the first time a Development Financial Institution in India has implemented MonetaGo’s Secure Financing system, setting a new standard for secure lending in the sector.

MonetaGo’s de-risk solution helping SIDBI to empower MSMEs

Established in 1990 and regulated by the Reserve Bank of India, SIDBI is a nodal agency that promotes and finances MSMEs. It plays a crucial role in bridging credit gaps, supporting entrepreneurship, and driving inclusive growth through government-backed schemes.

Smt Y M Kumari, CGM at SIDBI, emphasised the partnership’s goal of enhancing trust in lending processes and improving capital flow efficiency. 

“SIDBI is committed to facilitate access to capital and build capacity of MSMEs, enabling deeper integration into India and global value chains. We are proud to partner with MonetaGo and adopt the globally interoperable Secure Financing system. This partnership will reinforce trust in lending, and in turn contribute to greater efficiency and reliability in capital flows, helping unlock the sector’s growth potential.” She quoted.

By adopting MonetaGo’s globally interoperable Secure Financing platform, SIDBI aims to unlock the growth potential of MSMEs through more reliable and transparent financing. The platform provides real-time validation and authentication of trade documents, reducing fraud risk and improving liquidity.

Addressing credit risk to boost competitiveness through secure financing 

Improving transparency and reducing fraud risk are important to expanding credit access and enhancing the global competitiveness of Indian MSMEs. “As SIDBI strengthens support for this sector, de-risking credit flows will be key to unlocking growth and resilience,” added Shri Sudatta Mandal, Deputy Managing Director of SIDBI.

MonetaGo’s Secure Financing system, the world’s first trade finance registry of its kind, has been integral to India’s digital trade finance infrastructure since 2018.  Since early 2023, platforms using this technology have helped increase financing for MSMEs by 216%. This shows how the system has changed access to credit.

Kalyan Basu, Managing Director India at MonetaGo, called SIDBI’s adoption a turning point in fraud prevention for MSME lending. He quoted, “MSMEs are the backbone of the Indian economy, and protecting their financing from fraud is essential to expanding access to credit. We look forward to supporting SIDBI’s mission and impact.”

Neil Shonhard, CEO of MonetaGo, stated, “This milestone reinforces the vital role of digital public infrastructure in safeguarding lending and supporting economic growth, not just in India, but globally. We are proud to partner with SIDBI in its mission to empower India’s MSMEs.”

Fueling economic growth for MSMEs in India

SIDBI’s use of MonetaGo’s system sets an example for other financial institutions seeking to secure MSME financing. This partnership is part of a broader global trend of leveraging digital public infrastructure to foster transparency, reduce risk, and support sustainable economic development.

MSMEs in India contribute 30.10% to GDP, 35.40% to total manufacturing activities, and 45.73% to exports. India needs solutions that can open the door to secure financing for this growing MSME ecosystem. Amidst this, SIDBI and MonetaGo’s partnership is a welcome step.