SIDBI and MonetaGo Join Forces to Secure MSME Financing

In a significant stride towards building a safer and more transparent credit ecosystem for India’s micro, small, and medium enterprises (MSMEs), the Small Industries Development Bank of India (SIDBI) has announced a strategic partnership with MonetaGo — a global leader in fraud prevention solutions for trade finance.

This collaboration marks a crucial milestone — it’s the first time a Development Financial Institution (DFI) in India has directly adopted MonetaGo’s secure financing system, a technology that’s already been recognized globally for preventing financial fraud and duplication in trade transactions.

At its core, this partnership is about one thing: trust — ensuring that India’s hardworking MSMEs can access credit seamlessly, safely, and transparently in an increasingly digital world.

A Stronger Foundation for MSME Financing

For over three decades, SIDBI has been at the forefront of empowering India’s small businesses. Established in 1990 by the Government of India and regulated by the Reserve Bank of India (RBI), SIDBI has consistently focused on promoting entrepreneurship, driving innovation, and making credit more accessible for small enterprises.

The new partnership with MonetaGo strengthens this mission by bringing advanced digital public infrastructure into the MSME credit landscape — an ecosystem that has rapidly evolved with the rise of platforms like GST Sahay Invoice-Based Financing and TReDs (Trade Receivables Discounting System).

Y M Kumari, Chief General Manager at SIDBI, underscored the importance of this initiative, saying, “SIDBI is committed to promoting cash-flow-based, digitized credit flow to MSMEs, which could be further enhanced by building resilience and transparency in the MSME financing ecosystem, more particularly GST-Sahay Invoice Based Financing. We are proud to partner with MonetaGo to implement an interoperable solution providing dedupe functionality on the Invoice Dedupe Registry (IDR) of TReDs to avoid double financing. This will reinforce trust in lending and boost efficiency and reliability in capital flows.”

The “dedupe” functionality Kumari refers to is crucial — it prevents instances where a single invoice might be used to secure loans from multiple lenders, a challenge that can create vulnerabilities in digital lending systems. By introducing MonetaGo’s secure infrastructure, SIDBI aims to strengthen the reliability of credit transactions across the board.

De-risking Credit for India’s Growth Engines

For India’s MSMEs — which collectively contribute around 30% to the country’s GDP and employ over 110 million people — access to timely and secure credit is often the difference between growth and stagnation.

Sudatta Mandal, Deputy Managing Director of SIDBI, highlighted how this partnership fits into a larger vision of resilience and competitiveness for the sector, “Improving transparency and reducing risk in lending is vital to expanding credit access for India’s MSMEs and boosting their global competitiveness. De-risking credit flows will be key to unlocking growth and resilience for the sector.”

In simpler terms, the initiative ensures that MSMEs — from small manufacturers in Coimbatore to exporters in Surat — can focus on building their businesses, without worrying about systemic risks or credit fraud undermining their financial stability.

The Technology Behind the Partnership

At the heart of this partnership lies MonetaGo’s Secure Financing System, a fraud prevention infrastructure that has been operational in India since 2018. Built to work seamlessly across multiple financial platforms, it enables lenders to check for duplicate or suspicious financing requests without sharing sensitive borrower information — maintaining both data privacy and systemic integrity.

Kalyan Basu, Managing Director (India) at MonetaGo, described the collaboration as a “turning point” for institutional fraud prevention in MSME financing:

“SIDBI’s adoption of MonetaGo’s Secure Financing System marks a turning point in institutional fraud prevention for MSME lending on the GST-Sahay platform. Protecting MSME financing from fraud is essential to expanding access to credit, and we are proud to support SIDBI’s mission.”

Globally too, MonetaGo’s solutions have been recognized for their role in building secure trade finance infrastructure. The company’s technology helps financial institutions, fintechs, and governments ensure that every credit transaction is verified, authentic, and unique.

Neil Shonhard, CEO of MonetaGo, emphasized the broader impact of this move, saying, “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.”

Numbers That Tell a Story

Since early 2023, the number of MSMEs receiving financing on RBI-supported digital platforms powered by MonetaGo’s technology has surged by an impressive 216%. This figure speaks volumes about the transformative power of secure, interoperable financial infrastructure in driving inclusion and innovation within the credit ecosystem.

With the SIDBI-MonetaGo partnership, this growth trajectory is expected to accelerate further — ensuring that every loan extended through digital channels carries the confidence of verified authenticity and reduced risk.

A Step Towards a Safer, Smarter Financial Future

As India continues its digital transformation journey, ensuring security and trust in financial systems becomes paramount. MSMEs, often described as the backbone of India’s economy, stand to gain immensely from innovations that blend technology with accountability.

This partnership is not just a technical integration; it’s a step toward redefining how credit flows in a country that’s home to over 6.3 crore small businesses. By creating a foundation that’s both secure and scalable, SIDBI and MonetaGo are laying the groundwork for a more inclusive and resilient economic future.