PSB platform set to boost digital loans to small business

MUMBAI: Beginning Jan 2026, a PSB alliance digital platform for lending to small business will start functioning at scale opening up a new avenue for MSME financing. The platform will allow any fintech or entity that serves MSMEs, including dealers, to plug in and provide a financing interface for small businesses. At the other end, 12 public sector banks will provide digital loans to these enterprises.Speaking to TOI, Sorabh Dhawan, CEO of PSB Xchange, said the platform aims to disburse Rs 3 lakh crore of loans by 2030.PSB Xchange is designed as a multi-lender system connecting corporates and their channel partners with banks, NBFCs and fintechs. “Created by PSB Alliance in partnership with Veefin Solutions, it enables digital credit delivery across the country. This is the first time India’s largest lenders are coming together on a common exchange to serve MSMEs,” Dhawan said.“I have spent most of my 18-year banking career underwriting and financing MSMEs, and I have seen first-hand the strength and potential of this segment. Supply chain finance can unlock that potential at scale, and I believe PSB Xchange will play a decisive role in transforming access to working capital,” he said.He said that at present only 14-15% of MSMEs currently access formal financing. “Our objective is to expand this coverage and make capital available at competitive rates. By onboarding fintechs, corporates, dealers, distributors, suppliers and lenders on a single platform, we ensure MSMEs can access funds at sub-10% rates, instead of relying on high-cost credit,” he said.Dhawan said the platform has around 70 sourcing partners live and can be used by nearly 9,900 fintechs in the country without integrating individually with each bank.