Credit and finance for MSMEs: Enterprise SaaS company Actyv.ai has partnered with Unity Small Finance Bank to provide B2B Buy Now Pay Later (BNPL) solutions to small and medium businesses (SMBs). Actyv.ai offers an AI-backed platform with embedded B2B BNPL to support SMBs “with a purpose-based, affordable, and unsecured BNPL solution,” the company said in a statement.
“SMB customers in India have so far been availing traditional finance solutions leading to growth capital constraints. Our partnership with actyv.ai will enable us to utilize a robust AI platform and offer SMBs timely access to credit, thereby helping them avoid supply bottlenecks and shortages in funds,” said GL Kumar, Chief Business Officer – Business Banking, Unity Bank.
Launched in November 2021 by Centrum Group and fintech company BharatPe, Unity Bank lends to SMBs along with supply chain finance. The partnership will enable both companies to leverage each other’s distribution network and credit appetite to offer AI-driven and ring-fenced credit to SMBs. Ringfencing is referred to separating a part of a company’s assets or profits.
The Indian BNPL market in terms of transaction value is expected to be worth $4.9 billion in 2022 and grow at a likely compound annual growth rate (CAGR) of 32.5 per cent to become $15 billion in size by 2026, driven by increased demand for short term credit coupled with growing consumer preference for online shopping, according to a November 2022 report by data and analytics company GlobalData.
Raghu Subramanian, Founder and Global CEO of Actyv.ai said “B2B BNPL system has grown tremendously and we are category creators in the B2B segment. Unity Small Finance Bank products are digitally embedded on our technology platform to drive digital access and deliver transformation in the supply chain ecosystem. Through responsible and sustainable options, the platform will improve the financial agility and operational efficiency of all the ecosystem stakeholders.”
Importantly, according to a report by the Reserve Bank of India (RBI) in November last year, even though the amount disbursed under BNPL loans (B2B or B2C) is only 0.73 per cent by commercial banks and 2.07 per cent by NBFCs of the total amount disbursed, the volumes are quite significant (37 per cent by banks and 11.9 per cent by NBFCs) indicating a large number of small size loans for consumption.